The Reserve Bank of Australia left its benchmark interest rate unchanged on Tuesday. The bank said that the Australian dollar is "still uncomfortably high," though, keeping in place the verbal pressure that has characterized the bank's approach in recent months. The market responded to the news by taking AUDUSD higher: December futures traded at the CME were up 0.5% in late afternoon trading.

The sharp decline from $1.05 this year has provided some relief to the economy, and most bank strategists see more downside to come for 2014. In the short term, the best approach is to position for a pause and collect some premium while waiting for the next catalyst to move the currency lower. Option implied volatility here is at two-month highs after moving sharply higher in the last couple weeks.

This trade sells short-term puts to partially finance the purchase of longer-dated puts. It will profit if the volatility term structure of AUD volatility steepens, since the short January puts will lose value more quickly than the long March puts. If the trade works out nicely, we may be able to sell or roll to February options as well.

Trades: Buy to open 6AH4 (March) 0.91 puts for $0.0193 and sell to open 6AF4 (January) 0.90 puts at $0.0068.

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Equity-only investors can put on a similar position using the CurrencyShares Australian Dollar Trust (FXA), multiplying the strike prices by 100.

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At the time of publication, Jared Woodard held positions in 6A.