USD/CAD traces upbeat options market signals to poke two-year top around 1.3840

One-month risk reversal (RR) on USD/CAD, a measure of the spread between call and put prices, remained positive for the fourth consecutive day by the end of Monday’s North American trading session as per the data source Reuters. 

A call option gives the holder the right but not the 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 daily RR prints the four-day winning streak with the latest 0.022 figure trying to consolidate the biggest weekly slump in the RR since late June, marked last week.

The options market signals back the latest USD/CAD price performance as the Loonie pair pokes the two-year high marked in September around 1.3840 heading into Tuesday’s European session.

It should be noted that the firmer US Dollar Index (DXY) and the softer prices of Canada’s main export item, WTI crude oil, also add strength to the USD/CAD upside.

Also read: USD/CAD renews weekly top around 1.3800 as hawkish Fed bets battle with oil’s rebound