The cost of insuring against undue volatility in the pound through Thursday’s monetary-policy decision by the Bank of England has crept up as investors prepare to parse the tone of the central bank’s rhetoric. While most economists expect Governor Mark Carney and his committee to raise the benchmark interest rate, traders are bracing for a risk that the move could signal the first step toward continued tighter policy rather than a one-and-done increase. Should Carney signal that the market is behind the curve in pricing future hikes, volatility in the pound may remain elevated.
Source: Bloomberg Pro Terminal
Trader Nikolay Georgiev
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