USD/MXN hits two-month low as call bias weakens

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Risk reversals on USD/MXN, a gauge of calls to puts, fell to two-month lows on Monday, indicating a weakening of demand for call options or bullish bets. 

The gauge stood at 2.938, the lowest level since March 12, having topped out at 7.48 on March 23. The decline indicates the demand or implied volatility premium claimed has weakened. That said, the figure is still positive, meaning calls are still drawing higher prices compared to puts. 

Nevertheless, the pullback validates the Mexican Peso's recovery from lows seen in March. 

USD/MXN is currently trading at 24.03, representing a 0.40% gain on the day, having hit a record high of 25.7782 on April 6. 

Risk reversals

USD/MXN hits two-month low as call bias weakens
 

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