GBP/USD: Put premium hits two-week lows

The GBP/USD one-month 25 delta risk reversals (GBP1MRR) are currently trading at -2.175 in favor of puts - a level last seen on Nov. 14 - having printed a 2.5-year low of -2.84 on Nov. 15.

The decline in the implied volatility premium (or demand) for GBP put options, as represented by the rise in risk reversals, could be a sign that investors are not expecting GBP/USD to challenge recent low of 1.2696.

As of writing, GBP/USD is trading at 1.2750.

GBP1MRR