• Implied volatility is the option market gauge of actual volatility

• There's typically a premium for options in one direction versus the other

• Risk reversals are option contracts that identify that premium

• In GBP/USD its for GBP puts over calls (downside strikes)

• However, its currently testing new 1-year lows in 1-3-month expiries

• Suggests dealers are less bearish on GBP vs USD, despite current sub 1.20

• Broader implied volatility falling too - consistent with range trading

• However, possible value before big data, Fed and BoE nL1N3580KO

• UK bank still eyes 1.3000 view nL8N3573KF. Related nL1N3581GE

  
  

  
  

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