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USD/CAD risk reversals retrace CAD bearish bias

FX Street
Updated:
  • USD/CAD risk reversals hit a  three-week low, signals  falling demand for CAD puts (bearish bets).

The demand for CAD put (bearish bets) is falling, the risk reversals show.

Currently, the USD/CAD one month  25 delta risk reversals (CAD1MRR) are being paid at 0.125 CAD puts – the lowest since May 15  and down from the recent high of 0.20 CAD puts.  The drop from 0.20 to 0.125 indicates falling implied volatility premium for CAD puts (falling demand).

The decline in CAD put premium also indicates the investors expect USD/CAD to turn lower from 1.30 neighborhood.

CAD1MRR

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