• EUR/USD FX option implied volatility is back under pressure as spot losses stall and realised volatility drops

• Benchmark 1-month expiry up from Jan low at 5.35 to 6.0 since last week a spot fell to 1.1600, but since slips to 5.7

• Risk reversals nudged higher in favour of EUR puts, recognising the spot setback — but moves remain measured

• 1-month 25-delta risk reversal peaked 0.6 EUR puts Wed, now 0.5 — well below March long-term high at 1.5

• Hedging demand was light, with the most common strikes being sought in the 1.1550-1.1500 zone

• Bottom line: price action consistent with low realised volatility and a modest downside bias — options cautious, not alarmed
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


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