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British Pound Futures Volatility Forecast (23/01/2011)

The last week we predicted a return of volatility towards its long term equilibrium level and so it was. Also, the forecasted price was 160 and the current pound futures are now trading around the 160.4 area.

The actual volatility is 0.57% (9.04% annualised) and it seems that will remain in this zone over the upcoming trading days too. The British Pound Futures price will tend to go higher and touch 162-163 by the end of the next week even if the UK Mortgage Approvals data to be released on Wednesday could destabilise the price.

Nevertheless, the staff of HyperVolatility suggests, once again, to opt for a buy and hold strategy since the price should keep soaring and the great stability of the volatility plot is a confirming factor which validates the hypothesis that many investors believe more in a strengthening of the British Pound against the US Dollar than the opposite.

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