Home Forex USD/CAD hovers near 2-year high around 1.3500 as options bulls retreat

USD/CAD hovers near 2-year high around 1.3500 as options bulls retreat

by SuperiorInvest

USD/CAD grinding higher after retrieving a 26-month high at 1.3530, near 1.3510 during Thursday morning in Europe. Meanwhile, the Loonie pair is tracking options market signals amid risk-averse markets.

USD/CAD’s one-month risk reversal (RR), a measure of the bid-ask spread, was unchanged on Wednesday after rising the most in a week the previous day, according to options market data from Reuters. It should be noted that the weekly RR remains positive but features a softer reading of 0.084 versus 0.158 previously.

A call option gives the holder the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a certain date. A put option represents the right to sell.

It’s worth noting that the previous optimism among USD/CAD traders could be related to hawkish Fed action, while the recent inaction appears to be a cue from firmer oil pricesCanada’s largest export.

Also read: USD/CAD renews 26-month high near 1.3485 as Fed boosts USD, oil weakens

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