June 7 (Bloomberg) -- The cost for European banks to borrow in dollars rose, reversing two days of declines, according to a money-markets indicator.
The three-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, was 52 basis points below the euro interbank offered rate at 12:40 p.m. in London, according to data compiled by Bloomberg. That’s from minus 50 basis points yesterday and compares with minus 59 on June 4, which was the most expensive in three months.
The one-year basis swap declined to 58 basis points below Euribor, from minus 60 yesterday. A basis point is 0.01 percentage point.
Prices in the forward market for three-month Euribor relative to overnight indexed swaps -- known as the FRA/OIS spread -- climbed to 35 basis points from 32.5.
The Euribor/OIS spread held at 38 basis points. The measure has been little changed for the past two months. The three-month Euribor benchmark rate was unchanged at 0.663 percent today, according to the European Banking Federation.
Lenders cut overnight deposits at the Frankfurt-based European Central Bank yesterday, placing 785 billion euros ($988 billion) from 787 billion euros the day before.
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