AUD/USD: Premium for put options rises with the weak Aussie CPI release

Omkar Godbole FXStreet Contributor

One-month 25 delta risk reversals on AUD/USD(AUD1MRR), a gauge of puts to calls on the Australian currency, fell from -0.65 to -0.725 post the Aussie CPI release, signaling a rise in demand (implied volatility premium) for the Aussie dollar put options (bearish bets).

The inflation, as represented by the consumer price index, rose 0.3 percent quarter-on-quarter in the first quarter, missing the estimated rise of 0.4 percent, the official data released at 01:30 GMT today showed.

The first quarter annualized core CPI or RBA's trimmed mean also missed estimates by printing at 1.6 percent, after having risen 1.8 percent in the preceding quarter.

The increased demand for the Aussie puts indicates the investors are hedging for a deeper drop in the Australian currency. The AUD/USD hit six-week lows near 0.7030 a few minutes before press time.

AUD1MRR

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.