One-month risk reversal (RR) of GBP/USD, a gauge of calls to puts, snaps a two-day downtrend by the end of Tuesday’s North American session. In doing so, the RR prints 0.0000 level, following the -0.042 and -0.050 numbers.
Although the options market data suggests that the GBP/USD sellers have stepped back, concerns over Brexit, recently fueled by comments from an Irish Foreign Minister Simon Coveney, challenge the pair buyers.
Also questioning the pair buyers is the market’s anxiety over the Fed’s next action and inflation concerns ahead of the US Consumer Price Index. Hence, the resulting figure of 0.0000 seems to be justified.
Adding to the watcher’s list is Thursday’s UK GDP, as well as the British covid conditions, which pose a challenge to the GBP/USD bulls.
That said, the quote seesaws around 1.3560 after the previous day’s pullback from the weekly top.