Sterling tumbles on Brussels and Brexit worries

Cost of hedging sterling rockets 14.5%

The cost of hedging the pound hit a six-year high yesterday as the recent terrorist attacks in Brussels and fears surrounding a British exit from the European Union weighed on investor sentiment.

After two days of sharp falls  that saw sterling move 2.5% lower against the dollar, the price of hedging against further falls rose to levels unseen since at least 2010, surpassing prices seen ahead of last year's UK general election and Scotland 2014 independence referendum, according to the Financial Times.  Fund pickers reassess UK equity fund exposure as Brexit fears weaken sterling Three-month sterling/dollar options, the cost of insurance against a change in the value of the pound, rose to 14.5%, while three-month sterling/euro options jumped to 13.7%, the highest since April 2...