LONDON, June 8 (Reuters) - Market bets on how volatile the pound will be over the next 24 hours surged to their highest in a year on Thursday as Britain began voting in a parliamentary election which some polls show has become too close to call.
Headline rates for sterling hit two-week highs in morning trade in London after polling organisations’ last surveys before voting showed Prime Minister Theresa May’s Conservatives on course for victory.
Volumes of spot trading in sterling against the dollar and euro were less than half of their normal daily averages and the bigger price action was in options structures companies and investors use to hedge against major swings in the currency.
Sterling overnight implied volatility surged past 30 percent against both the euro and the dollar.
Against the European single currency those were the highest rates since the aftermath of last year’s Brexit referendum vote to leave the European Union. (Reporting by Patrick Graham, editing by Nigel Stephenson)