Currency Traders Focus on Australian Dollar and Euro for Bearish Dollar Bets

Options traders are using currencies such as the Australian dollar and euro to express bearish US dollar views after recent disappointing American economic data.

The Aussie is being supported by the Reserve Bank of Australia’s “cautious and gradual” stance on easing, as well as improving risk sentiment. The euro’s allure has grown from expectations an increase in regional defense spending will support the euro-zone economy, and a more hawkish-sounding European Central Bank. Meanwhile, things look rockier for the US dollar as data showed jobs growth missed expectations in July with downward revisions to prior months as well.