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Pound Options Show Traders Bracing for Volatility as BOE Nears
It’s looking like a busy day for pound traders. Investors and economists are betting the Bank of England will increase its key rate a quarter point when it meets later Thursday, but decisions in the past 24 hours by the US Federal Reserve and the Swiss National Bank have raised the possibility that an even larger hike could be on the table. Pound volatility cooled from its peak on Wednesday in the wake of the Fed’s 75 basis-point rate increase, but demand for one-day options to hedge against swings remains high. Options gauges suggest the UK currency could sink below $1.20 if pound bulls are left disappointed by ... (full story)