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GBP/USD options: bearish bias weakest since Aug. 31

The GBP/USD one-month 25 delta risk reversals (GBP1MRR) are currently trading at -0.75 - the highest level since Aug. 31.

The negative number indicates a bias for a weaker pound. The bearish bias, however, has weakened significantly in the last few days, as the risk reversals stood at -1.85 in early December and at -2.68 in mid-November.

Moreover, the rise from -2.68 to -0.75 represents a slide in the implied volatility premium or a drop in demand for put options.