Dollar demand picks up sharply as turmoil in banks rattles investors

Reuters · 03/10/2023 08:38
Dollar demand picks up sharply as turmoil in banks rattles investors

- Demand for U.S. dollars in the currency derivative markets surged on Friday to its highest since mid-December, after a meltdown in U.S. banking stocks ignited a wave of investor risk aversion.

Three-month euro/dollar cross currency basis swap spreads traded as as -17 basis points EURCBS3M=ICAP, the most since December 14, reflecting a pickup in demand for hard cash. They were last trading at -14.

An index of European banks .SX7P was heading for its biggest one-day fall since last June, as shares in the region's biggest lenders dropped in sympathy with a steep decline in the value of Wall Street's biggest lenders on Thursday.


(Reporting by Amanda Cooper; Editing by Dhara Ranasinghe)

((amanda.cooper@thomsonreuters.com; +442031978531; Twitter: https://twitter.com/a_coops1;))