One-month risk reversals on British pound (GBP), a gauge of calls to puts, drops to the very best since the week ending on Saint Joseph during early Friday’s trading session, indicating investors are turning bearish before the key US inflation data, namely Core Personal Consumption Expenditure (PCE) price level for April.
Read: US PCE inflation preview: Gold remains key asset to observe
Risk reversals jumped to -0.063, in favor of put or bearish bets consistent with the newest weekly data provided by Reuters.
The negative reading indicates put options are drawing a better premium (option price) than calls or bullish bets. In other words, the choices market is most bearish in nearly two months before the key US data.
That said, GBP/USD retreats to 1.4190, down 0.13% intraday, after rising the foremost in three weeks the previous day.