Spot-Vol Correlation as a Reason for Skew

Not all option markets exhibit skew (in the conventional sense). Many currency pairs are not skewed in the same way that equity index options exhibit skew, and are sometimes said to exhibit "reverse skew".  Here skew refers to the tendency of low strike options to have higher implied volatilities than high strike options. This is partly, or perhaps entirely, depending on your view, due to spot-vol correlation. As spot falls, realized volatility increases. Implied volatility generally rises with realized volatility, so a lower spot price should mean "otherwise equivalent" (say ATMF) options should be priced with higher volatility. The option seller wants protection (or, looked at from another angle, compensation) from the negative spot-vol correlation on the downside.