Money markets react to aggressive selloff, dollar demand soars

News Image

MG News | April 07, 2025 at 01:47 PM GMT+05:00

0:00

April 07, 2025 (MLN): Money markets on Monday began showing signs of strain following an aggressive selloff engulfing global equities, sending various measures of demand for dollars to their strongest in months.

Three-month cross-currency basis swaps, a derivative that reflects non-U.S. demand for dollars, shot to their strongest level for the euro and the pound since late 2023.

Meanwhile, those for the Japanese yen reached their strongest in five months.

The rate of the three-month euro cross-currency basis swap hit -5.375%, its lowest since November 2023.

A more negative number indicates demand for dollars from euro-based investors. A week ago, the swap rate was at 12.5%

U.S. President Donald Trump at the weekend showed no signs of backing down from the widespread tariffs he announced last week that have sent shockwaves across world markets.

China has already retaliated with extra tariffs investors now fear a global recession, as Reuters reported.

"Keep a close watch of the EUR/USD (euro/dollar) three-month cross-currency basis swap," ING strategists said in a note.

Any sharp widening in favor of the dollar (i.e., the interbank market prepared to lend out euros in the swap market at below-market rates to secure dollar funding) would be a sign of trouble.

This could briefly send the dollar higher before the Federal Reserve is forced to step in.

 Copyright Mettis Link News

 

Related News

Name Price/Vol %Chg/NChg
KSE100 138,412.25
167.69M
0.32%
447.43
ALLSHR 85,702.96
423.92M
0.15%
131.52
KSE30 42,254.84
82.09M
0.43%
180.24
KMI30 194,109.59
84.37M
0.15%
281.36
KMIALLSHR 56,713.67
217.03M
0.03%
16.37
BKTi 37,831.34
13.04M
1.62%
603.62
OGTi 27,440.63
3.93M
-0.09%
-23.70
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 119,170.00 119,440.00
118,260.00
875.00
0.74%
BRENT CRUDE 71.81 73.17
71.75
-0.70
-0.97%
RICHARDS BAY COAL MONTHLY 96.50 0.00
0.00
2.20
2.33%
ROTTERDAM COAL MONTHLY 104.50 104.50
104.50
-0.30
-0.29%
USD RBD PALM OLEIN 998.50 998.50
998.50
0.00
0.00%
CRUDE OIL - WTI 68.53 69.79
68.45
-0.68
-0.98%
SUGAR #11 WORLD 16.45 16.58
16.44
-0.14
-0.84%

Chart of the Day


Latest News
July 30, 2025 at 04:11 PM GMT+05:00

PSX Closing Bell: You Can’t Always Get What You Want


July 30, 2025 at 03:47 PM GMT+05:00

CCP resolves 223 cases, recovers Rs360m


July 30, 2025 at 03:15 PM GMT+05:00

SBP keeps policy rate unchanged at 11%


July 30, 2025 at 03:09 PM GMT+05:00

LSE Capital exits Ensmile Limited


July 30, 2025 at 03:06 PM GMT+05:00

PMYP, PILDAT sign landmark LOI to strengthen youth



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg