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GBP / USD risk reversals at 3 months decrease as volatility increases
ForexLive
Option traders are on the side of spot traders in the direction of the pound in July and the 3-month GBP / USD risk reversals indicate that option traders are seeing even more difficulties for the pound before the end of the year. Brexit deadline of 31 October.
The three-month risk reversals have fallen sharply this month and will further shrink next week, as the Boris Johnson government continues to talk about a Brexit no-win result.
This is because the implied 3-month volatility of the pound is also at its highest level since early April this year. This only adds to the notion of sterling positioning mentioned earlier today. We must be aware that market players continue to rely on the pound while the currency has reached its lowest level in 28 months against the dollar.
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