UPDATE 1-Brexit jitters drive sterling volatility to tape-record high, pound deteriorates

(Adds quote, information) The pound was up to an eight-week
low on Monday while the expense of hedging against huge swings in
its exchange rate versus the euro over the coming month struck a.
record high, 10 days before Britain votes on whether to remain in.
the European Union. Betting markets suggest Britons will opt to continue to be in the EU.
but some recent surveys have shown the “Leave” camp ahead,.
producing anxiety amongst investors. Hedge funds and asset managers are increasingly seeking to.
protect their exposure to UK markets through derivatives. Data.
suggests speculators are adding to bets versus the pound with.
brief positions at their highest in at least three years. Many analysts reckon a vote to leave the EU on June 23 would.
shock Britain’s economy and send sterling toppling by 15-20.
percent, while a vote to remain would be most likely to drive the.
currency dramatically higher.

” We anticipate incoming surveys to move the pound more.
strongly than in the past,” said Charalambos Pissouros, senior.
expert at IronFX Global. “If new polls continue to show a tight race between the 2.
campaigns as we approach the ballot day, the result is most likely.
to become a lot more unpredictable and hence, volatility in sterling.
is likely to increase further.”.

Euro/sterling one-month suggested volatility,.
originated from an alternative that covers the referendum date and its.
consequences, hit 26.3 percent according to Reuters information,.
going beyond the previous record of around 25 percent meetinged during.
the worldwide monetary crisis in 2008. The equivalent sterling/dollar one-month suggested volatility.
rocketed to 28.1 percent, near to its 2008 peak of.
around 29 percent.

That anxiousness has permeated into area rates, pressing the.
pound back listed below $1.42 to its most affordable because mid-April.
and 0.6 percent weaker to 79.45 cent per euro. The Brexit problem has actually controlled the marketplace because late last.
year, driving a decline of more than 10 percent in sterling on a.
trade-weighted basis in between mid-November and mid-April. Britain’s hefty bank account deficit– 7 percent of.
output in the last quarter of 2015– makes the economy, and the.
currency, particularly susceptible to any pull-back in investment.
flows.

( Reporting by Anirban Nag and Jemima Kelly; editing by John.
Stonestreet).

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