• EUR/USD 1-week expiry options include today's US jobs data, 10 Sep ECB and 11 Sep US CPI data

• 1-week expiry implied volatility has increased from 5.0 to 5.5 after including the latter

• That still appears low when compared to 1-week daily realised volatility at 6.05

• Realised volatility is actual volatility over the previous 1-week and can offer a fair value measure for coming period

• Current implied vol pricing suggests a greater chance of actual/realised volatility outperforming it over the next week

• Volatility can be monetised by constantly adjusting an opposing cash hedge to the option position which offsets currency risk
1-week EUR/USD FXO implied vs realised

(Richard Pace is a Reuters market analyst. The views expressed are his own)