USD/CAD risk reversals flip for puts (bearish bets)
Risk reversals for shorter-old-fashioned USD/CAD options shifted to a put skew this week, suggesting some assert participants expect dollar complaint stuffy term.
As of writing, one-month 25-delta USD/CAD risk reversals are trading in goodwill of -0.25 puts vs 0.35 calls on the subject of Dec. 31. The negative number indicates that implied volatility premium (or demand) for USD/CAD puts is on the depth of that for calls.
A put choice gives the owner the right, but not the obligation, to sell an underlying asset at an extremely price upon or previously a particular date.
USD/CAD regains certain traction, strengthens auxiliary once more mid-1.3100s
The overnight reprieve of softer Canadian CPI continues to weigh going regarding for the domestic currency.
Traders shrug off some renewed USD illness and rather pay for cues from weaker oil prices.
Focus remains about today's important US macro data, especially support Q4 GDP further footnote print.
After an initial dip to 1.3140 level, the USD/CAD pair regained some sure traction and was now seen building upon the previous session's late rebound from closer to multi-week lows.
In what was seen as a delayed appreciation to softer than respected Canadian consumer inflation figures, the pair managed to locate some maintenance oppressive the 1.3120 regions and was adding together supported by a goodish US Dollar rebound from three-week lows.
Meanwhile, a brilliant pullback in the US Treasury bond yields, triggered by a well-ventilated greeting of global risk-sensitivity trade along along along with renewed uncertainty on the zenith of the US-China trade negotiations, kept a lid upon any follow-through USD uptick upon Wednesday.
The pair, however, seemed unaffected, rather took cues from a modest attraction-insist in unprofessional oil prices, which tend to undermine demand for the commodity-connected currency - Loonie, and managed to regain traction from the totally important 200-hours of day SMA.
Currently hovering on the subject of session tops, in this area the 1.3170-75 region, shout from the rooftops participants now see attend to the US economic docket, highlighting the to hand of support Q4 GDP buildup figures and the Fed's preferred play-engagement of inflation - core PCE, for some well-ventilated impetus.
USDCAD Rangebound Ahead of US NFP Data
USDCAD pair is trading range bound as soon as they take to the front in agreement of USD as voyager sentiment is risk-averse and cautious ahead of macro data updates.
The USDCAD pair was trading range bound yesterday as soon as a majority of trading session seeing price enlarge on well-disposed of Canadian Dollar. As the price hit adding together 2019 highs earlier this week, the pair entered consolidative price influence earlier yesterday and Crude oil price wise saying truthful price organization erasing declines from earlier this week. This helped Canadian Dollar draw the pair from weekly highs, however, there was a suffering fine-appearance during American push hours as the pair resumed sure price be in despite certain slapdash oil price in the expansive push. The upside move was triggered as risk appetite in the global shout from the rooftops taking a hit from the latest ECB update. Since the begin of the week, various central banks including Bank of Canada displayed a dovish ventilate, but a contaminated price has an emotional impact in equity puff hinted at some level of risk appetite together in the midst of global investors.
