Paying to Get Dollars Is Most Expensive Since 2012 in Swaps
- Outlays for banks in the euro area, U.K. and Japan jump
- Central bank divergence adds to year-end demand for greenback
What Happens After the First Fed Hike?
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A crunch is developing in international funding markets.
The cost to convert local currency payments in the euro area, U.K. and Japan into dollars has jumped amid speculation the Federal Reserve will raise interest rates in December. With other major central banks set to hold, or even loosen, monetary policy, the projected policy divergence is supercharging the usual year-end uptick in demand for dollar funding.