Prepare for the Pound to Become Even More Volatile
- Measure of sterling swings over three months near year-high
- Hedging pound exposure into Oct. is most costly since 2016
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Traders are bracing for further turbulence in the pound as the risk increases of a chaotic U.K. exit from the European Union.
A measure of expected swings over the next three months, covering the Oct. 31 Brexit deadline, has surged to near the highest this year after Queen Elizabeth II approved Prime Minister Boris Johnson’s request to suspend Parliament for almost five weeks. That sets up a battle with lawmakers trying to block no-deal and the currency is likely to react to every political headline.