Euro concerns and flight to the U.S. dollar and dollar-based funding has created shortages of U.S. dollars in some Asian markets.
In Thailand, swap offered rates fell amid concerns that Europe’s debt problems are prompting a sharp increase in demand for dollar funding.
“I think there are still shortages and this is keeping pressure on forex swaps, fixings and interest rate swaps,” said a Bangkok-based trader.
In India, onshore dollar premiums slid with six-month and one-year premiums falling to two-month lows as concerns about dollar liquidity resurfaced… the Mumbai interbank forward offered rate (MIFOR) eased to 4.03 per cent from 4.13 per cent on concerns that dollars could grow scarce if foreign investors start exiting emerging markets.
A strengthening dollar in 2010 would be Ben Bernanke’s ultimate vindication.