May 23, 2018 / 10:43 AM / in a month

Currency derivative markets signal further weakness for euro

LONDON (Reuters) - Currency derivative markets are signalling further weakness for the euro with one-year risk reversals on the single currency — a gauge of demand for options on a currency rising or falling — dropping to a seven-month low on Wednesday.

FILE PHOTO: Presentation of a new 2 Euro commemorative coin of former German Chancellor Helmut Schmidt in Berlin, Germany, February 2, 2018. REUTERS/Christian Mang

One year risk reversals fell to minus 0.4 after being in positive territory as recently as Monday, indicating that demand for euro puts has surged to protect downside risks, according to traders.

The single currency fell 0.5 percent to $1.1698 for the first time in six months after eurozone economic growth slowed much more sharply than expected this month.

Reporting by Saikat Chatterjee

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