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Jan 11 - 06:55 AM

GBP/USD - Options Buy Topside Protection Before U.S. And UK Data

By Richard Pace  —  Jan 11 - 04:50 AM
  • Dealers already reporting preference to own GBP and GBP call options vs USD

  • Demand seems more about USD weakness than GBP strength as EUR/GBP unmoved

  • Options raise cost of broader FX volatility protection over U.S. CPI data

  • Overnight expiry GBP/USD implied volatility 14.0 vs 10.0 since CPI inclusion

  • Overnight expiry also now includes Friday's UK GDP and manufacturing data

  • Premium/break-even for straddle now 75 from 53 USD pips in either direction

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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