USD/INR: Options market shows strongest bullish bias since May 2020

One-month risk reversals on USD/INR, which measures the spread between call and put prices, jumped to 1.30 on Friday – the highest level since May 2020, indicating the strongest bullish bias in 10 months.

The data shows investors are adding bets (calls) to position for dollar strength/weakness in the Indian rupee (INR).

A call option gives the holder a right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. 

USD/INR surged by 1.63% to 73.9170 on Friday as rising US bond yields, and risk-off in stocks drew haven bids for the dollar.