Options Traders Are Boosting Bearish Dollar Views to Record

Currency options traders are now more pessimistic than they’ve ever been about the dollar’s path over the next year, according to one commonly-cited measure of investor sentiment.

One-year risk reversals — a gauge of how expensive it is to buy versus sell a currency in the options market — fell to minus 27 basis points in favor of puts over calls for an aggregate proxy of Bloomberg’s dollar gauge. That mark is the most negative level on record, according to Bloomberg data going back to 2011, surpassing even a level briefly hit at the outset of pandemic-driven market gyrations five years ago.