• Benchmark 1-month EUR/USD implied volatility peaked 13.8 Friday (now 12.5)

• However, that's up from 8.0 since 02 April trade tariff's imposed

• Current levels are highs since 2022 and prior to that - 2020

• EUR/USD topside strike option premium ever new highs since March 2020

• Benchmark 1-month 25 delta risk reversals to 1.3 EUR calls over puts

• 3-month now 1.1 and 1-year 0.6 EUR calls over puts

• Recall - all dates were neutral early last week - no directional premium

• Topside short covering and fears of more EUR/USD spot gains driving demand
EUR/USD FXO implied volatility


EUR/USD risk reversals

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