GBP/USD risk reversals turn south on put demand

One-month risk reversals on GBP/USD, a gauge of calls to puts, has turned lower this week, a sign of renewed demand for put options or bearish bets on the British currency. 

Risk reversals traded at -1.60 in favor of GBP puts on Wednesday versus -1.35 on Monday. It shows investors are adding bets (puts) to position for weakness in the GBP. The gauge rose from -2.575 to -1.35 in the four weeks to Oct 12. 

At press time, GBP/USD is trading mostly unchanged on the day at 1.3010, having printed a high of 1.3083 on Monday.