GBP/USD risk reversals hit 3-month low, signaling more pain for Sterling

Risk reversals on Sterling, a gauge of call options to put options on the British currency, fell to their lowest level since Dec. 12 in Asia, indicating investors are adding bets to position for the sell-off in GBP/USD amid Brexit uncertainty. 

GBP/USD one-month risk reversals (GBP1MRR) are currently trading at -1.7 in favor of put options (bearish bets) - a level last seen in mid-December. 

Notably, the decline from the highs near -1.00 seen three weeks ago indicates rising demand for put options. 

GBP1MRR