💶🔻EUR/USD Longer Term Riskies Reach Most Bearish In Four Months: Cable FX Macro

• Recent desk chatter and option market activity have pointed to an increase in interest of EUR/USD parity. The euro weakness is derived from U.S. economic resiliency, monetary policy divergence, and the new U.S. administration posing tariff risks.

• While the dollar has strengthened over the last week, taking the euro below 1.0600 on Tuesday session, skewness is showing that market participants do not expect the euro to make a comeback soon.

• EUR/USD 1m risk reversals hold a 56bps premium in favour of puts, the 1y tenor ticks at 123bps, the most bearish since early July. As of the time of writing, 1m implied vol ticks at 7.745%, up 32bps on the session, the tenor now covers the December ECB monetary policy decision