LONDON, March 12 (Reuters) - The dollar rebounded on Thursday as swap spreads on major currency pairs blew out to their widest levels in years in a sign that dollar demand is rising across the board.
The dollar index which started in the red, firmed as much as 0.5% while three-month euro/dollar cross currency basis swap spreads jumped to a late-2017 high of 65 bps.
“It’s all about dollar liquidity, the cross-curency basis swap has blown out. I would assume it’s banks/corporates driven. We are moving to the next phase of the selloff,” said Kenneth Broux, a strategist at Societe Generale.
Reporting by Saikat Chatterjee and Sujata Rao