Demand for dollars from non-U.S investors surges as stocks crumble

Reuters

Mon, Apr 7, 2025, 1:32 AM 1 min read

LONDON (Reuters) - Money markets connected Monday began showing signs of strain pursuing an assertive selloff engulfing planetary equities, sending assorted measures of request for dollars to their strongest successful months.

Three-month cross-currency ground swaps, a derivative that reflects non-U.S. request for dollars, changeable to their strongest level for the euro and the lb since precocious 2023, portion those for the Japanese yen reached their strongest successful 5 months.

The complaint of the three-month euro cross-currency ground swap deed -5.375%, its lowest since November 2023. A much antagonistic fig indicates request for dollars from euro-based investors. A week ago, the swap complaint was astatine 12.5%

U.S. President Donald Trump astatine the play showed nary signs of backing down from the wide tariffs helium announced past week that person sent shockwaves crossed satellite markets.

China has already retaliated with other tariffs investors present fearfulness a planetary recession.

"Keep a adjacent ticker of the EUR/USD (euro/dollar) three-month cross-currency ground swap," ING strategists said successful a note.

"Any crisp widening successful favour of the dollar (i.e., the interbank marketplace prepared to lend retired euros successful the swap marketplace astatine beneath marketplace rates to unafraid dollar funding) would beryllium a motion of occupation and could concisely nonstop the dollar higher earlier the (Federal Reserve) is forced to measurement in."

(Reporting by Amanda Cooper; Editing by Dhara Ranasinghe)