GBP/USD volatility at lowest since March

Omkar Godbole FXStreet Contributor

Sterling volatility hovers at multi-month lows despite fears of new coronavirus strain in the UK and lockdown restrictions.

One-month GBP/USD volatility is seen at 7.465%, having hit a low of 7.225% on Jan. 22, according to data source Reuters.

Prime Minister Boris Johnson warned on Friday that the new UK COVID-19 variant might be associated with a higher level of mortality. Further, the British government has extended lockdown laws to give councils the power to close pubs, restaurants, shops, and public spaces until July 17.

So far, however, there are no signs of stress in the market, as evidenced by GBP/USD's low volatility. A potential rise in volatility could pvae the way for a drop in GBP/USD. The currency pair is currently trading near 1.3665.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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