July 2 (Bloomberg) -- The cost for European banks to borrow in dollars declined to the lowest in more than a week, 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 53.5 basis points below the euro interbank offered rate at 8:30 a.m. in London from minus 56 basis points on June 29. The measure reached minus 59 on June 4, the most expensive in three months.
The one-year basis swap was little changed at 51 basis points below Euribor. A basis point is 0.01 percentage point. Euribor is the rate banks say they see each other lending in euros and is derived from a survey by the European Banking Federation.
Prices in the forward market for three-month Euribor relative to a gauge of overnight borrowing costs or overnight indexed swaps -- known as the FRA/OIS spread -- were at 26 basis points from 27. A decrease signals banks are more willing to lend. The Euribor/Eonia OIS spread was 41.5 basis points from 42.
The Eonia OIS swap, an estimate of average overnight borrowing costs over the next three months, was at 24 basis points from 23 on June 29. The measure held below the European Central Bank’s deposit rate of 25 basis points for the 11th day.
Lenders cut overnight deposits at the Frankfurt-based ECB on June 29, placing 773 billion euros ($977 billion) from 782 billion euros the day before.
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