(Adds link to Tuesday's FX option strike expiries )

• Far from Panic stations, but FX options recognise the latest pressure on EUR/USD and react accordingly

• 1-month expiry 25 delta risk reversals marginally increase premium for EUR puts over calls from 0.25 to 035

• Benchmark 1-month expiry implied volatility has increased from 2026 lows at 5.4 to 5.675

• Other expiry dates have seen implied volatility losses stall while EUR/USD downside risks persist

• As GBP has just demonstrated, it wouldn't take much to reward option holders at these low levels

• U.S. CPI is the near term risk while eyes stay on any developments in the Mid-East conflict

• Plenty of huge EUR/USD FX option expiries and related hedging flows can impact FX

• Related comment - GBP might be the canary in the FX coal mine
EUR/USD 25 delta risk reversals


EUR/USD FXO implied volatility


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