Euro Options Turn Most Bearish Since 2022 on Fear of Long War

Traders have turned the most pessimistic on the euro since Russia invaded Ukraine four years ago as the war in the Middle East drags on, sending energy prices soaring and threatening Europe’s economy.

In the options market, so-called one-week risk reversals show bearish sentiment on the common currency is now at levels seen after the 2022 invasion, at the start of the Covid-19 pandemic and during elections in the US and France that stoked geopolitical uncertainty. The euro dropped earlier on Monday to $1.1507, its weakest versus the dollar in nearly four months.