USD/CNH risk reversals hit record low, point to more pain in the USD

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Risk reversals on USD/CNH, a gauge of calls to put, plunged to record lows, indicating investors are adding bets to position for further strength in the offshore Chinese yuan (CNH).

As of writing, the one-month 25 delta risk reversals (CNH1MRR) are trading at a lifetime low of -0.688. Notably, the gauge stood at -0.20 on Jan. 4.

The negative number indicates that the demand for put options (bearish bets) is higher than that for calls (bullish bets).