One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, prints the strongest weekly reading since late March, according to data source Reuters.
With the premium on the calls rising beyond the puts, bulls are likely returning to the fore. However, today’s Bank of Canada (BOC) monetary policy meeting becomes the key.
Read: Bank of Canada Preview: Dovish surprise to lift USD/CAD
The mood in the options markets could have taken clues from the Canadian budget and covid fears. That said, the US order to keep border controls with Canada and workplace activity restrictions are some additional positives for the USD/CAD prices.
At press time ahead of Wednesday’s European session, USD/CAD consolidates the previous day’s heavy gains, the biggest in five weeks, while taking rounds to 1.2600.
Read: USD/CAD Price Analysis: Snaps two-day uptrend ahead of BOC