Fresh cycle lows for the pair and the...>

EURO-DOLLAR: Fresh cycle lows for the pair and the diverging rates outlook for

the Fed and ECB are raising further questions for how much lower the pair could

go. The options market currently sees a 4.7% probability of EUR/USD touching the

early 2017 lows of $1.0341 by the end of 2019, a probability that has more than

doubled since the beginning of July (back then, it stood at 1.2%).

-The moves in volatility since the Fed have skewed the EUR/USD smile curve

materially in favour of OTM puts, after being broadly balanced at the beginning

of the week. 5D 3m put vols now sit above 7 points, after sitting at 6.5 on

Monday - a pattern that's repeated across the vol surface this morning.