USD/CAD hits highest since October
|- USD/CAD hits multi-month highs as oil takes a beating.
- Investors are adding bets to position for gains in USD/JPY, options market data shows.
The Canadian dollar is on the offer in Asia and is powering gains in the USD/CAD pair.
The currency pair rose to 1.3348 a few minutes ago to hit the highest level since Oct. 3 and was last seen trading at 1.3338, representing marginal gains on the day.
Oil drops
West Texas Intermediate (WTI) oil is currently trading at a 13-month low of $48.07, representing a nearly 10% drop on a week-to-date basis.
The black gold has come under pressure, possibly due to coronavirus-led risk aversion in the equity markets and seems to be weighing over the loonie. After all, oil is one of Canada's major exports.
Call demand spikes
One-month risk reversals, a gauge of calls to puts, jumped to 0.425 on Wednesday, to hit the highest level since March 2018. The gauge has in a V-shaped manner from -0.20 to 0.425 in the last four days.
The data indicates the investors are adding bets (call options) to position for a sustained rally in the USD/CAD pair.
Technical levels
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.