Dollar funding squeeze eases after March madness
Fed action helps restore equilibrium, leaving fears of quarter-end crunch unfounded
US dollar funding markets returned to normal over the quarter-end, say traders, after a volatile month during which extreme movements in the cross-currency basis for widely used pairs led to liquidity being “frozen” at times.
Buy-side firms had looked to roll their quarterly FX swaps early due to fears of a possible liquidity crunch, but traders say conditions have been calm over the past few days.
“There were no surprises,” says Adrian Averre, head of FX derivatives electronic trading at BNP
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