Traders bet on volatile pound

As Scots began voting Thursday on a secession referendum, financial markets busied themselves with the prospect of a swing in the value of the British pound.

Bets on likely currency fluctuations in the next 24 hours have doubled ahead of the outcome of the vote, which analysts say is too close to call.

With some polls indicating a slight lead for those in favor of staying in the United Kingdom, overnight sterling/dollar implied volatility rose to a high of 34.75 percent - nearly ten times as high as one month ago.

On Wednesday overnight options closed at around 12.75 percent.

Underscoring the potential impact the plebiscite could have on international markets, a top official in the administration of US President Barack Obama said Washington would be watching the vote very closely.

"It's an internal debate within the UK right now but obviously there are potentially significant economic ramifications," Treasury Secretary Jack Lew said. "We're all watching with great interest."

On Thursday morning, the pound was trading at $1.63 (1.27 euros), markedly higher than the 10-month low of $1.60 seen last week.

cjc/bew (Reuters, dpa)