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

March 25, 2021 by admin 0 Comments

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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.

This article was originally published by Fxstreet.com. Read the original article here.