Pound Slides Ahead of Central Bank Announcements

The British Pound has been experiencing weakness leading up to key announcements from major central banks. The currency's futures, B6Z26, settled at 1.3481 on September 15, following reports of meetings between Scottish, Welsh, and Northern Irish premiers. This trend downward is expected to continue due to the consensus for 25 basis point hikes from the Federal Reserve (FOMC) and Bank of Japan (BoJ), while the Bank of England (BoE) is likely to hold rates steady.

The central banks' announcements, along with ongoing independence referendum discussions in the UK, have created a unique market opportunity. Traders are considering short Pound positions, including futures, covered puts, and debit put spreads, as well as various spreads in futures and options.