FOREX-Dollar surges as companies scramble for liquidity

* Dollar jumps on concerns over coronavirus fallout
* Cross-currency swaps show funding strains
* Aussie falls to lowest since 2003

(New throughout, updates prices, market activity and comments
to U.S. market open, new byline, changes dateline, previous
LONDON)
By Karen Brettell
NEW YORK, March 17 (Reuters) - The U.S. dollar surged on
Tuesday as companies and investors sought out the most liquid
currency as concerns about economic shutdowns from the
coronavirus continued to dent risk appetite.
The Federal Reserve on Sunday slashed rates to zero and
launched a new bond purchase program. Other central banks have
taken similar measures but the moves have so far failed to stem
liquidity strains and market panic.
Central banks have also cut pricing on their swap lines to
make it easier to provide dollars to financial institutions
around the world.
But funding markets show continued stress in sourcing the
greenback.
Three-month euro/dollar cross-currency basis swap spreads
EURCBS3M=ICAP rose as high as 120 basis points, up from less
than 90 on Monday and putting the spread as its widest since
late 2011 - the height of the euro zone debt crisis.
“Stress here is helping lift the USD,” said Shaun Osborne,
chief FX strategist at Scotiabank in Toronto.
The U.S. currency had initially fallen in early March as
U.S. government bond yields tumbled, but the dollar has since
rebounded, and measured against a basket of major currencies is
now up around 5% since March 9.
The dollar index =USD was last at 99.43, up 1.33% on the
day.
Investors are looking for the Fed to support to the
commercial paper market, which companies tap for short-term
loans, and for governments to launch new fiscal stimulus to help
offset an economic downturn.
President Donald Trump's administration and leading
Republicans urged the Senate on Monday to swiftly back a
House-passed coronavirus aid plan and seriously consider massive
new economic stimulus legislation that was still under
development. Data on Tuesday showed that U.S. retail sales unexpectedly
fell in February, with households cutting back on purchases of a
range of products, and the coronavirus outbreak is expected to
depress sales in the months ahead. The euro EUR= dropped 1.63% to $1.10.
The dollar rallied 1% versus the yen to 106.91 yen JPY= .
The Australian dollar AUD= , which is sensitive to global
growth due to the country's commodities exports, fell 1.70% to
$0.6013, its weakest since 2003. It is down 10% since March 9.
The Reserve Bank of Australia has reiterated it stands
ready to ease policy further in the face of the unprecedented
spread of the coronavirus, adding to speculation about
aggressive stimulus measures this week. Currency bid prices at 9:52AM (1352 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0999 $1.1181 -1.63% -1.88% +1.1188 +1.0975
Dollar/Yen JPY= 106.9100 105.8500 +1.00% -1.79% +107.1800 +105.8800
Euro/Yen EURJPY= 117.63 118.38 -0.63% -3.53% +119.6700 +117.3600
Dollar/Swiss CHF= 0.9600 0.9469 +1.38% -0.81% +0.9619 +0.9458
Sterling/Dollar GBP= 1.2059 1.2266 -1.69% -9.05% +1.2273 +1.2056
Dollar/Canadian CAD= 1.4129 1.4016 +0.81% +8.79% +1.4163 +1.3962
Australian/Doll AUD= 0.6013 0.6117 -1.70% -14.36% +0.6149 +0.5983
ar
Euro/Swiss EURCHF= 1.0561 1.0587 -0.25% -2.68% +1.0604 +1.0547
Euro/Sterling EURGBP= 0.9119 0.9113 +0.07% +7.87% +0.9134 +0.9067
NZ NZD= 0.5985 0.6044 -0.98% -11.15% +0.6095 +0.5935
Dollar/Dollar
Dollar/Norway NOK= 10.4577 10.2773 +1.76% +19.16% +10.5260 +10.1672
Euro/Norway EURNOK= 11.5070 11.4940 +0.11% +16.97% +11.5677 +11.3240
Dollar/Sweden SEK= 9.9560 9.7811 +0.35% +6.51% +10.0071 +9.7309
Euro/Sweden EURSEK= 10.9515 10.9136 +0.35% +4.61% +10.9964 +10.8628