USD/CNY risk reversals flip bearish for first since March

  • USD/CNY risk reversals drop below zero for first since March. 
  • The data indicates puts are drawing a higher price than calls. 

USD/CNY puts have become more expensive than calls for the first time since March. 

Risk reversal, which reflects pricing differential between puts and calls, for one-month 25-delta options, traded at -0.075 skewed in favor of USD/CNY puts on Monday, having topped out at 0.90 on May 28. 

In layman’s terms, the negative number is reflective of stronger demand for put options or bearish bets on USD/CNY compared to call options or bullish bets. In other words, investors are adding bets to position for a decline in USD/CNY. 

At press time, USD/CNY is trading at 7.008, representing a 0.15% gain on the day, but down over 2% from the high of 7.1766 registered on May 27. 

The pair could slide further in the near term if the equities shrug off renewed virus concerns and remain bid on the back of the unprecedented monetary and fiscal stimulus measures launched by the US and other global authorities. 

China data released early Tuesday showed exports rose for the third straight month in June, a sign of recovery in the global economy. Also, imports rebounded sharply, indicating a recovery in domestic demand. Both exports and imports are encouraging signs for the global economy.

Risk reversals

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD edges above 1.18 amid mixed US data, slim stimulus hopes

EUR/USD is trading above 1.30 after US Durable Goods Orders beat expectations but Consumer Confidence missed estimates. Hopes for a US stimulus deal are slim with a week left until the elections.


GBP/USD stabilizes above 1.30 amid Brexit and covid uncertainty

GBP/USD is hovering above the round 1.30 levels as rising UK COVID-19 cases, uncertainty about Brexit, and PM Johnson's political problems weigh on sterling. US data has been mixed.


XAU/USD ticks up to $1,910 and turns positive on the day

Gold futures have found support right below the $1,900 area earlier today before inching up to $1,910, turning positive on daily charts. The precious metal lost ground, with the US dollar building up during the European session on Tuesday, to appreciate during the North American session with market sentiment improving moderately.

Gold News

Bitcoin breaks new yearly highs; the road to $15,000 is clear

Bitcoin breaks new yearly highs and hits $13,464. The road to $15,000 is clear as there are no major resistance levels above the current price.

Read more

WTI trims losses and moves near $39.00/bbl ahead of API

Following two consecutive daily pullbacks, prices of the West Texas Intermediate regain some buying interest and reach the $39.00 mark per barrel on turnaround Tuesday.

Oil News