The cost for European banks to fund in dollars rose, according to money-market indicators.
The one-year cross-currency basis swap, the rate banks pay to convert euro payments into dollars, was 68.5 basis points below the euro interbank offered rate at 8:37 a.m. in London, from minus 68 yesterday, data compiled by Bloomberg show.
The three-month basis swap was 101 basis points under Euribor from minus 102 yesterday. A basis point is 0.01 percentage point.
A measure of banks’ reluctance to lend to one another in Europe increased. The Euribor-OIS spread, the difference between the borrowing benchmark and overnight index widened to 87 basis points from 86 yesterday.
Lenders cut overnight deposits at the European Central Bank, placing 73 billion euros ($101 billion) with the Frankfurt-based ECB yesterday, down from 299 billion euros Nov. 7. That compares with a year-to-date average of 71 billion euros.
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