One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, dropped to the lowest levels since November 04 on Monday, per 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. 

That said, the daily difference between them slumped to the -0.113 level, also reversing Friday’s first positive reading in five days, heading into Tuesday’s European session, per Reuters.

The options market scenario backs the USD/CAD sellers ahead of today’s Canada GDP and Fed Chair Jerome Powell’s testimony. The reason for the bearish bias could be linked to the market’s cautious optimism on Monday.

However, the latest doubts over the vaccines’ abilities to tame the South African covid variant, dubbed as Omicron, favor USD/CAD buyers.

Against this backdrop, USD/CAD prints 0.30% intraday gains around 1.2790 by the press time.

Read: Yields, Euro Stoxx 50 Futures tumble as Omicron risks escalate

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