WSJ:Short-Term Dollar Funding Costs Spike As Year-End Looms Into View
LONDON (Dow Jones)--A money-market indicator of short-term dollar funding costs spiked Tuesday at its highest level in three years as the period for which it's calculated spilled over into the new year, interdealer broker ICAP said.
In a sign that seasonal year-end funding pressures are being magnified by the euro-zone sovereign debt crisis, the implied one-month euro-dollar cross-currency basis swap--which tracks the cost of swapping one-month euro funds into dollars--fell to as low as minus 134 basis points in European hours.
That was the lowest since November 2008 and occurred as the end-date for one-month forward foreign exchange prices was pushed forward to Jan. 3, 2012, due to seasonal holidays.
The one-month basis swap had fallen 24 basis points to minus 129.5 basis points in opening European trade.
-By William Kemble-Diaz, Dow Jones Newswires; 44-20-7842-9347; william.kemble-diaz@dowjones.com
