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Activity Lagging, But Some Hotspots for FX Options

OPTIONS

Overall FX options volumes are lagging slightly, with muted trade in USD/JPY and EUR/USD keeping markets quiet. Nonetheless, there are some hotspots of activity, with USD/CNY, AUD/USD and USD/KRW proving much busier so far Tuesday.

Implied vols are bid across most DM and EM currencies, with the largest moves today seen in AUD and KRW 1m contracts - albeit they remain within recent ranges.

For AUD, following the minutes release overnight downside protection in AUD/USD has been sought in size, with $0.73 put strikes trading frequently and in considerable volumes (around $4bln notional traded at that strike today alone, according to DTCC data).

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