Bets on EUR/USD dropping remain small even though pair has collapsed

Traders short equivalent of just $3.1 billion dollars

Largest short held throughout Fed's tightening cycle is $3.2 billion

Bets materially impacting prior trends $25-30 billion

Perhaps economists who remain bullish are influencing traders

Bubble chart reveals scarcity option hedging below 0.9900 until end-Dec

More bubbles = more expiries. Bigger bubble = bigger expiries

EUR/USD has dropped 1.2135-0.9952 since Fed signalled taper Jun 16 2021

Fed seen hiking 75bps in Jul, ECB 25bps

One-year forward swap has widened 90 pips to 282 pips since taper signal