USD/CAD: Risk reversal jumps the most in five weeks

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, marks the heaviest bullish bias since May 11, according to data source Reuters. 

A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the difference between them jumped to +0.225 by the end of Wednesday’s trading session, per Reuters.

Following the initial rally on the US Federal Reserve-led (Fed) market action, comments from the BOC Governor Tiff Macklem keeps the quote positive around the highest level since May 05.

That said, second-tier Canadian data and WTI moves will be the key to follow for USD/CAD traders for fresh direction.

Read: BoC Macklem: Further adjustments to our QE program will be gradual