Global Risks Renew Dollar Demand in the Currency Swaps Market

A measure of demand in the $9.5-trillion-a-day foreign-exchange market is signaling renewed appetite for US dollar funding as a spiraling war in the Middle East slams global risk appetite.

Measures of the so-called cross-currency basis - the extra cost investors pay or receive when sourcing dollars overseas instead of the US — show a surge in demand in recent trading for the greenback relative to the Swiss franc, euro, pound and other major currency peers.