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Reuters - 44 minutes ago

UK election risk to GBP, according to FX options

BUZZ-COMMENT-UK election risk to GBP, according to FX options July 4 (Reuters) - Implied volatility gauges FX realised volatility expectations and is a key component of an FX option premium. Overnight expiry GBP related implied volatility now includes the UK election and is therefore a bellwether for related FX volatility risk. Overnight GBP/USD implied volatility has averaged 7.5 over recent sessions - a premium/break-even of 40 USD pips in either direction for a simple vanilla straddle.
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Reuters - 1 hour ago

Bulk of GBP impact from UK election to stem from exit poll

RPT-BUZZ-COMMENT-Bulk of GBP impact from UK election to stem from exit poll Repeats with no changes July 4 (Reuters) - The UK will head to polls in just under a week, though compared to previous UK elections there is less uncertainty than usual about the outcome of the July 4 vote. Opinion polls have consistently shown that the Labour Party is set for a historic majority.
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Reuters - 19 hours ago

FX options wrap - FX outlook, French risk, ZAR gains, yuan bets

BUZZ-FX options wrap - FX outlook, French risk, ZAR gains, yuan bets Implied volatility is under pressure in most of the major G10 currency pairs, which is consistent with low realised volatility within familiar FX ranges. The impending U.S. Thanksgiving holiday and better risk appetite/USD losses, are playing their part . Euro-related FX option premiums have almost fully retraced the significant gains that were made in the wake of the French election call in mid-June.
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Reuters - 21 hours ago

Sterling set for fifth daily rise ahead of UK election

Sterling set for fifth daily rise ahead of UK election LONDON, July 3 (Reuters) - The pound rose on Wednesday, taking advantage of a softening in the dollar and a reading of business activity that showed growth in the British services sector cooled in June, but not by as much as initially forecast. The U.S. currency weakened against most others on Wednesday, bar the Japanese yen and Chinese yuan, after comments from Federal Reserve Chair Jerome Powell the previous day reinforced expectations tha
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Reuters - 2 days ago

FX options wrap - Elections risk, billions, JPY hedge, yuan

BUZZ-FX options wrap - Elections risk, billions, JPY hedge, yuan While French election risk premiums have eased and UK election risk premiums are small, there's been a pick up in demand for USD call options since last weeks U.S. Presidential debate helped Trump's ratings. Euro related options have seen their volatility and EUR put over call premiums lowered since the first round of French election results.
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Reuters - 2 days ago

Sterling dented by one-two punch from dollar and euro

Sterling dented by one-two punch from dollar and euro LONDON, July 2 (Reuters) - The pound neared its lowest in almost two months against a robust dollar on Tuesday, as the U.S. currency got a lift from a pop higher in Treasury yields, while the euro extended its modest rally over the last week. Investors in U.S. assets are contemplating the prospects of a second Donald Trump presidency, after President Joe Biden's faltering debate performance last week and Monday's Supreme Court ruling that the
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Reuters - 2 days ago

French election risk to euro, according to FX options

BUZZ-COMMENT-French election risk to euro, according to FX options July 2 (Reuters) - When the French election was first called on June 9, there was a significant increase in FX option premium to reflect the volatility and directional risk to the euro, and these premiums remain a reliable bellwether. Volatility is an unknown yet key component of an FX option premium, so dealers use implied volatility as a stand-in.
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Reuters - 3 days ago

FX options wrap - Election pricing, JPY fears, ZAR risk

BUZZ-FX options wrap - Election pricing, JPY fears, ZAR risk French elections have driven euro-related implied volatility to new long-term highs alongside EUR puts over call premiums on risk reversals, but there's been some relief selling after the first-round results. EUR/USD 1-month expiry implied volatility is back at 5.9 from 6.5 on Friday and a long-term peak at 7.75 in mid June.
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Reuters - 3 days ago

Sterling loses ground to euro after French election first round

Sterling loses ground to euro after French election first round By Harry Robertson LONDON, July 1 (Reuters) - The pound slipped against the euro on Monday as the single currency rallied on investor expectations that France's far right party might not secure an outright majority after winning the first round of a national election. The euro EURGBP=D3 was up 0.27% against the pound at 84.97 pence, climbing further away from a two-year low of 83.97 pence hit in mid-June.
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Reuters - 6 days ago

FX options wrap - Elections, intervention and data risks ahead

BUZZ-FX options wrap - Elections, intervention and data risks ahead Overnight expiry euro related options have seen their FX volatility risk premiums increase since expiry now includes the first round results of the impending French elections. The premium/break-even for overnight EUR/USD opened in London around 70 USD pips - a new 2024 peak . There's a clear preference to own EUR/USD downside strikes as reflected by risk reversals - their EUR put over call implied volatility premiums saw a signi
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Reuters - 6 days ago

Bulk of GBP impact from UK election to stem from exit poll

BUZZ-COMMENT-Bulk of GBP impact from UK election to stem from exit poll June 28 (Reuters) - The UK will head to polls in just under a week, though compared to previous UK elections there is less uncertainty than usual about the outcome of the July 4 vote. Opinion polls have consistently shown that the Labour Party is set for a historic majority. As a result, the initial impact on sterling is expected to be considerably more muted than in recent times.
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Reuters - 6 days ago

Stand-out FX option strike expiries for the week ahead

BUZZ-COMMENT-Stand-out FX option strike expiries for the week ahead June 28 (Reuters) - The cash hedging of soon-to-expire FX option strikes can have a magnetic effect on FX price action and add to nearby support/resistance. There are some huge strikes worth noting for Friday June 28 and larger strikes for the week ahead. Stand-out EUR/USD strikes expiring on Monday are at 1.0685 on 1.3 billion euros and at 1.0700 on 2.6 billion euros.
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Reuters - 6 days ago

Sterling on track for monthly rise versus euro before UK vote

Sterling on track for monthly rise versus euro before UK vote By Stefano Rebaudo June 28 (Reuters) - Sterling was on track for its biggest monthly rise versus the euro since January as political concerns weigh on the single currency ahead of general elections in the UK and France. The pound edged higher on Friday after revised data showed Britain's economy pulled out of recession at a faster pace than previously thought in the first three months of this year.
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Reuters - 6 days ago

Huge demand for one particular French election hedge

BUZZ-COMMENT-Huge demand for one particular French election hedge June 28 (Reuters) - There has been a significant increase in premium and demand for an array of Euro related FX options since the announcement of impending French elections, but one particular trade stands out - risk reversals. Risk reversals are simple vanilla FX options that consist of a put strike set against a call strike - the right to sell a currency versus buy it.
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Reuters - 1 week ago

US dollar eases after soft economic data; yen inches higher

FOREX-US dollar eases after soft economic data; yen inches higher Market still on high alert for yen intervention U.S. continuing jobless claims rise in latest week U.S. durables fall unexpectedly Final U.S. GDP number for Q1 down from Q4 Fed's Bostic says he sees one rate cut in 2024 Adds comments, Fed's Bostic's remarks, graphic; updates prices By Gertrude Chavez-Dreyfuss NEW YORK, June 27 (Reuters) - The U.S.
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Reuters - 1 week ago

US dollar retreats after weak economic data; yen gets minor relief

FOREX-US dollar retreats after weak economic data; yen gets minor relief Yen rises, but not far from 38-year low vs dollar U.S. continuing claims rise in latest week U.S. durables fall unexpectedly Final U.S. GDP number for Q1 down from Q4 Recasts, adds new comment, U.S. data, updates prices By Gertrude Chavez-Dreyfuss and Amanda Cooper NEW YORK/LONDON, June 27 (Reuters) - The yen edged up from a 38-year low against the U.S.
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Reuters - 1 week ago

Sterling heads for first weekly gain in a month

Sterling heads for first weekly gain in a month LONDON, June 27 (Reuters) - The pound edged up on Thursday, heading for its first weekly gain in a month, as the dollar eased ahead of U.S. inflation data that could prompt the Federal Reserve to cut interest rates more than markets currently anticipate. Sterling GBP=D3 was up 0.2% at $1.265, set for a weekly rise of 0.1%, its first weekly increase since the end of May.
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Reuters - 1 week ago

FX options wrap - euro direction, JPY hedges, month-end, CNH

BUZZ-FX options wrap - euro direction, JPY hedges, month-end, CNH The USD is broadly higher on Wednesday and has supported most G10 FX option implied volatility curves. Month-end FX hedge rebalancing flows can add to volatility - models signal a mild need to sell the USD and buy EUR for June. Implied volatility in euro options expiring after the French election is well supported and euro puts retain a substantial premium to EUR calls since the election was announced, albeit now off their highs.
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Reuters - 1 week ago

Sterling dips as dollar strengthens while traders await U.S. data

Sterling dips as dollar strengthens while traders await U.S. data By Harry Robertson LONDON, June 26 (Reuters) - The pound dipped on Wednesday as the dollar strengthened while investors waited for the release of the Federal Reserve's preferred gauge of inflation on Friday. Sterling GBP=D3 was last 0.2% lower at $1.2661, around where it has traded for the last two weeks.
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Reuters - 1 week ago

Sterling's importance to global currency markets

REFILE-FACTBOX-Sterling's importance to global currency markets Refiles to fix hyperlink in first paragraph LONDON, June 26 (Reuters) - Sterling has faced its share of trials and tribulations in recent decades but remains a widely used currency, and, this year it has held up better against the dollar than peers. Here are some facts about the British currency: 1/ PERFORMANCE THIS YEAR The pound is trading around $1.27, up 23% from 2022's record low.
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