USD/CAD dribbles around mid-1.3100s even as options market flashes bullish signs

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USD/CAD seesaws around a seven-week high while pausing a three-day uptrend near the yearly peak marked in July. That said, the Loonie pair takes rounds to 1.3150-60 during Friday’s initial Asian session.

It should be noted that the softer prices of Canada’s main export WTI crude oil join the broadly firmer US dollar ahead of the US employment report for August to underpin the Loonie pair’s bullish bias. That said, the quote’s latest inaction could be linked to the pre-data inaction.

One-month risk reversal (RR) on USD/CAD, a measure of the spread between call and put prices, braces for the biggest weekly gain since mid-June per the data source Reuters. 

A call option gives the holder the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the weekly RR jumps to 0.312 by the press time of early Friday. That said, the daily RR also rose during the last consecutive three days with the latest print being 0.057.

Also read: Nonfarm Payrolls Preview: Five reasons to expect a win-win release for the dollar