Investor conviction over a lower EUR/USD is fading – ING

The FX options market hints that investors may not be that pessimistic on EUR/USD after all, economists at ING say.

FX options market less pessimistic

We have recently been discussing the very low levels of implied and realised volatility in EUR/USD. At the same time, however, the risk reversals – the price of a Euro put over a similar delta Euro call – have actually been showing the market becoming less pessimistic on the EUR. 

Despite the doom and gloom surrounding the eurozone economy, it seems that investor conviction over a lower EUR/USD is fading.