Euro/sterling options turn bullish! French fiscal risk may already be overpriced; traders bet on further exchange rate rebound.

Zhitong Finance APP has learned that after the euro experienced a historic sharp decline against the pound, options traders are positioning for a further rebound in the euro, betting that the euro had previously overpriced the risks surrounding the situation in France. As an indicator of market positioning and sentiment, euro-pound risk reversal options (Risk Reversals) have risen to their most bullish level for the euro since early October, indicating that demand for upside euro exposure is increasing.