- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
- Dollar eases after ferocious rally
- Cross currency swaps show continuing strains
(Adds quote, updates prices)
The dollar eased on Friday as six major central banks announced a coordinated action to enhance liquidity in the currency, but bounced off its lows in afternoon trading as stocks weakened.
The greenback has staged a ferocious rally this week as investors scrambled to obtain the currency, gaining 4.32% in its biggest weekly rise since the 2008 financial crisis.
Currencies from the Australian dollar AUD= to the British pound GBP= tumbled to multi-year lows after coordinated rate cuts by central banks and billions of dollars of fund injections failed to calm panicky markets.
On Friday six major central banks announced coordinated action to enhance liquidity in the greenback by increasing the frequency of their currency swap operations to occur daily.
"The enhancement of coordinated USD dollar liquidity operations on 15 March was already a significant step building on the experience of the Great Financial Crisis, but today’s shift to daily operations is unprecedented," said Frederic Ducrozet, a strategist at Pictet Wealth Management.
The U.S. dollar rose to 1.03, the highest since January 2017, against a basket of currencies =USD through a week when investors have liquidated everything from stocks to bonds to gold and commodities.
It was last 102.65, down 0.32% on the day. “For many countries with borrowings in dollars, the massive depreciation in their domestic currencies, and strength in the dollar, has been increasingly threatening at a time when most emerging market and developed-world economies are either headed to or are already in recession,” analysts at Action Economics said on Friday in a report.
Gauges of expected market swings in the euro for one-month maturities EUR1MO= edged lower, after hitting a more than three-year high on Thursday.
Some funding indicators, however, showed continuing strains in the market.
The premium over interbank rates that investors were paying to swap yen for one-year dollar funding JPYCBS1Y= fell on Friday but remained at elevated levels at around 55 basis points.
The FRA-OIS spread USDF-O0X1=R , a barometer of risk in the interbank market, edged higher on Friday to 99 basis points.
"While FX volatility is lower and currency basis swaps are less scary for example, the situation remains stressed," said Kit Juckes, a strategist at Societe Generale in London.
======================================================== Currency bid prices at 4:00PM (2000 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0669 $1.0690 -0.20% -4.84% +1.0831 +1.0638 Dollar/Yen JPY= 111.1100 110.6900 +0.38% +2.06% +111.5000 +109.3200 Euro/Yen EURJPY= 118.53 118.35 +0.15% -2.80% +119.2900 +117.8600 Dollar/Swiss CHF= 0.9873 0.9858 +0.15% +2.01% +0.9903 +0.9746 Sterling/Dollar GBP= 1.1582 1.1485 +0.84% -12.65% +1.1932 +1.1414 Dollar/Canadian CAD= 1.4394 1.4510 -0.80% +10.84% +1.4536 +1.4151 Australian/Doll AUD= 0.5805 0.5741 +1.11% -17.32% +0.5986 +0.5666 arEuro/Swiss EURCHF= 1.0531 1.0541 -0.09% -2.96% +1.0557 +1.0527 Euro/Sterling EURGBP= 0.9209 0.9308 -1.06% +8.92% +0.9338 +0.8998 NZ NZD= 0.5687 0.5671 +0.28% -15.57% +0.5880 +0.5613 Dollar/DollarDollar/Norway NOK= 11.6938 11.2486 +3.96% +33.21% +11.9357 +10.8044 Euro/Norway EURNOK= 12.5795 12.0280 +4.59% +27.87% +12.7980 +11.6061 Dollar/Sweden SEK= 10.4134 10.3884 +0.02% +11.40% +10.4290 +10.2151 Euro/Sweden EURSEK= 11.1070 11.1048 +0.02% +6.09% +11.1356 +10.9785
