Euro Traders Are Starting to Bet on a Break of $1.10 This Month
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Options traders are starting to bet on the euro dropping below psychological support at $1.10 as the European Central Bank prepares a stimulus package amid a deepening global downturn and trade uncertainty.
The odds that the euro breaks the $1.10 level by the end of August have risen to 49%, more than triple a week ago, according to Bloomberg’s options pricing model. Risk reversals, a gauge of market positioning and sentiment, show that traders are now bearish on the euro over the next week and in the long term.