AUD/USD is threatening to print 30-month low below 0.71, put value hits 17-month high
|- The AUD/USD risks falling 0.71 for the first time since March 2016.
- The AUD put value hit the highest level since April 7, 2017, signaling investors are expecting a deeper drop in the Aussie dollar.
The escalating trade war between the US and China and the widening US-Aussie rate differential could push the AUD/USD pair below 0.71 for the first time since March 2016.
Notably, the AUD/USD one-month 25 delta risk reversals (AUD1MRR) have dropped to -1.65 today - the lowest level since April 7, 2017 - indicating the implied volatility or the demand for the AUD puts is at a17-month high.
It indicates the investors are likely expecting a deeper drop in the AUD and hence buying put options as a hedge against the long spot positions.
AUD1MRR
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.