USD/CHF: Options market fades bullish bias

One-month risk reversal (RR) of USD/CHF, a gauge of calls to puts, eases to +0.1000 for the week ended on November 12, per the latest data from Reuters. The daily figures are 0.0000 per source.

It’s worth noting that the weekly RR jumped to the highest since the latest September 2020 during the first week of November, before stepping back of late.

Hence, it appears that the options market bulls are easing controls amid the recently softer US dollar. The reason could be linked to mixed concerns over the Fed rate hikes and inflation, as well as US stimulus.

Also favoring the USD/CHF pullback is the cautious sentiment ahead of the Sino-American talks and Tuesday’s US Retail Sales for October.

Above all, the US Dollar Index (DXY) has already jumped to a 16-month high and the Fed is still in limbo over the rate lift, which in turn hints at further consolidation on the greenback gauge. On the contrary, the risks relating to the Fed’s next move remain elevated and hence underpin the Swiss Franc’s (CHF) safe-haven demand.