Euro Rally Seen Extending if ECB Widens Policy Gap With Fed
Options traders are betting that the euro’s rally will gain further momentum in the coming days, as the European Central Bank’s meeting next week is expected to highlight a widening policy divergence with the US Federal Reserve.
Data from the Depository Trust & Clearing Corporation show that the most active trading level this month is around $1.18 per euro, with most of the notional value concentrated in contracts expiring on December 18–19, which coincides with the ECB’s rate decision window.
These flows suggest that investors expect the single currency to trade above the $1.18 level by the time policymakers conclude their meeting, amid expectations that the ECB will maintain a relatively tighter stance compared with the Federal Reserve.
Data from the Depository Trust & Clearing Corporation show that the most active trading level this month is around $1.18 per euro, with most of the notional value concentrated in contracts expiring on December 18–19, which coincides with the ECB’s rate decision window.
These flows suggest that investors expect the single currency to trade above the $1.18 level by the time policymakers conclude their meeting, amid expectations that the ECB will maintain a relatively tighter stance compared with the Federal Reserve.
