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Sterling Volatility Rises Ahead of May Brexit Speech

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Financial market bets on swings in the value of sterling over the next week reached their most extreme since October on Friday, driven by news that Prime Minister Theresa May will lay out more of her plans for Brexit negotiations next Tuesday.

One-week implied volatility – options contracts which allow traders to bet or hedge against swings in the currency over the next seven days – started climbing on Thursday afternoon after Downing Street confirmed the timing of the speech.

They rose again in early trade in London on Friday, hitting 14.775 percent compared to levels of around 11 percent mid-session on Thursday.

Reuters

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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