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AUD/USD picks up bids to refresh intraday high around 0.6920 during the mid-Asian session on Monday. The Aussie pair’s latest gains could be linked to the options market optimism, despite hawkish Fed bets and the Sino-American tension.
That said, the one-month risk reversal (RR) of the AUD/USD rose for the third consecutive day on Friday, to 0.055 at the latest, per the daily print. Even so, the weekly RR appeared to drop for the first time in three weeks.
It’s worth noting that the RR is the difference between the bullish bets (call options) and the bearish bets (put options).
The options market players might have been preparing for Wednesday’s US Consumer Price Index (CPI) data after witnessing a recent jump in the US Nonfarm Payrolls (NFP). Also likely to have favored the AUD/USD buyers could be the weekend release of China’s trade numbers for July.
Even so, the risk-off mood and the ongoing US-China tussles over Taiwan challenge the Aussie pair buyers during the sluggish start to the key week.
Also read: AUD/USD: Corrective pullback fades around 0.6900, Taiwan, US inflation in focus