Breaking: USD surges on funding stress, AUD/USD breaks 0.60, EUR/USD nears 1.10, GBP/USD 1.21
The demand for dollar is surging amid a global sell-off of stocks related to the coronavirus crisis.
EUR/USD is trading near 1.10, close to the monthly lows. GBP/USD has extended its slump, flirting with 1.21, the lowest since September. AUD/USD is around 0.60, a level that was last seen in 2003
Reuters reports that excessive US swap prices show the US dollar funding situation worsening. Dealers say overnight (T/N) EUR/USD swap 10% vs 0.15% on a regular day. The Benchmark 3-month EUR basis swap is -124 basis points - new high since 2012, and that was -154 in 2012 and -305 basis points during 2008 financial crisis. Large corporations said to be drawing down on available credit lines. Amid fears of further USD shortages, exacerbating the issue.
-- more to come