USD/CAD one-month risk reversals jump to most bearish in two weeks

Anil Panchal FXStreet

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, regains put (bearish) bias with a drop to -0.061 from +0.148 seen on March 24 versus -0.1000 flashed on March 11, according to data source Reuters.

A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell.

The latest pullback in the risk reversal suggests investors are trimming the bets to position for a rise in USD/CAD (or weakness in the Canadian dollar). The reason could well be traced from WTI’s recovery moves.

At press time, USD/CAD bounces off an intraday low of 1.2572 despite keeping the previous day’s pullback moves from 1.2609.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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