Foreign-exchange options markets are shifting before the Jackson Hole symposium begins, with demand rising for positions that hedge against further U.S. dollar strength. Data from CME Group show that, so far this week, 57.2% of dollar option flows have been positioned for the greenback to strengthen against major peers, up from 43.2% last week. Risk-reversal indicators also point to a notable narrowing in bearish sentiment toward the dollar.
The dollar had earlier come under pressure after U.S. Treasury Secretary Scott Bessent unexpectedly intervened in the bond market. It has since recovered half of those losses. Francesco Pesole, a currency strategist at ING, said remarks from Warsh could become the key event for foreign-exchange markets. Until there is more clarity, traders may be reluctant to build large short-dollar positions.
The report was cited by Reuters and republished by Odaily. The move suggests positioning is already changing even before the Jackson Hole meeting officially opens, with options flow and sentiment gauges both showing a less negative view on the U.S. currency.
Foreign-exchange markets have started to move before the Jackson Hole symposium opens, with stronger demand for hedges tied to a firmer U.S. dollar.
Options flow shows a more bullish dollar bias
According to CME Group, 57.2% of dollar options flow so far this week has been positioned for the U.S. currency to strengthen against major peers, up from 43.2% last week. Risk-reversal indicators also show that bearish sentiment toward the dollar has narrowed sharply.
Bessent's bond-market intervention had pressured the dollar
The dollar had earlier come under pressure after U.S. Treasury Secretary Scott Bessent unexpectedly intervened in the bond market. It has since recovered half of its previous losses.
ING points to Warsh remarks as a key event
Francesco Pesole, a currency strategist at ING, said Warsh's speech could be a key event for the FX market. Before the outcome becomes clearer, traders may be unwilling to put on large short-dollar positions.
The report was attributed to Reuters.
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