Sterling holds steady ahead of budget
Budget due Wednesday; fund managers sanguine for now
Options market shows demand for nearterm hedges

LONDON, Oct 29 Reuters The pound held steady on Tuesday, while sterling options rose to their highest since the start of the month, reflecting a modest degree of nervousness among traders a day before UK finance minister Rachel Reeves presents the new budget.

Overnight implied options volatility, a measure of demand for protection against very nearterm price swings, rose to its highest for sterling since Oct. 9, at 8.63 , while for eurosterling options, it touched its highest since Sept. 19, at 5.33

The pound itself was last unchanged on the day at 1.297, on course for its first monthly loss since September 2023, down around 3.

Reeves will deliver the new Labour government39;s first budget in 14 years on Wednesday, two years after thenPrime Minister Liz Truss39; taxcutting plans sparked a crisis in the bond market.

She plans around 40 billion pounds 52 billion worth of fiscal measures, according to government sources, mostly from tax increases plus cuts to some public services, to meet her pledge to cover daytoday spending without borrowing.

ING strategist Francesco Pesole said there was no political risk premium priced into the pound right now, while speculators are sitting on a fairly substantial bullish position in sterling futures, which could quickly get unwound if there is any disappointment stemming from the budget….