AUD/USD risk reversals slip to two-month low on put demand

One-month risk reversals on AUD/USD, a gauge of calls to puts, fell to a two-month low on Wednesday, indicating investors are adding bets or put options to hedge prospects of deeper losses in the Aussie dollar. 

According to data source Reuters, risk reversals are currently trading at -1.425 in favor of AUD puts – a level last seen on July 27.  Risk reversals were trading at -0.525 on Sept. 4. The decline indicates a rise in demand for put options. 

AUD/USD has pulled back from 0.7413 to 0.7130 seen this month. 

Risk reversals (Source: Reuters)