Dollar funding squeeze eases after March madness

Fed action helps restore equilibrium, leaving fears of quarter-end crunch unfounded

frozen-dollar-markets
Dollar thaw: liquidity returns to funding markets after brief freeze

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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