FOREX-Dollar surges as companies scramble for liquidity during pandemic

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

(Adds Fed launch of CP facility, Trump comments, updates
prices)
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 on concerns about economic shutdowns from the global
spread of the coronavirus.
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.
The Bank of Japan on Tuesday made its biggest injection of
dollar funds since 2008 and South Korea also pledged to act
soon. But funding markets show continued stress in sourcing the
greenback.
“Stress here is helping lift the USD,” said Shaun Osborne,
chief FX strategist at Scotiabank in Toronto.
Three-month euro/dollar cross-currency basis swap spreads
EURCBS3M=ICAP rose as high as 120 basis points - its widest
since late 2011 - before falling back to 39 basis points.
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 more than 5% since March 9.
The dollar index =USD was last at 99.72, up 1.63% on the
day.
The U.S. Federal Reserve said on Tuesday it would reinstate
a funding facility used during the 2008 financial crisis to get
credit directly to businesses and households. Investors are also looking for governments to launch new
fiscal stimulus to help offset an economic downturn.
U.S. President Donald Trump announced a plan on Tuesday to
send money to Americans immediately to ease the economic shock
from the coronavirus crisis. 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 1.77% to $1.098.
The dollar rallied 1.82% versus the yen to 107.78 yen
JPY= .
The Australian dollar AUD= , which is sensitive to global
growth due to the country's commodities exports, fell 2.42% to
$0.5969, its weakest since 2003. It is down over 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 3:25PM (1925 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0983 $1.1181 -1.77% -2.03% +1.1188 +1.0956
Dollar/Yen JPY= 107.7800 105.8500 +1.82% -0.99% +107.8600 +105.8800
Euro/Yen EURJPY= 118.39 118.38 +0.01% -2.91% +119.6700 +117.3300
Dollar/Swiss CHF= 0.9619 0.9469 +1.58% -0.61% +0.9648 +0.9458
Sterling/Dollar GBP= 1.2053 1.2266 -1.74% -9.10% +1.2273 +1.2004
Dollar/Canadian CAD= 1.4257 1.4016 +1.72% +9.79% +1.4261 +1.3962
Australian/Doll AUD= 0.5969 0.6117 -2.42% -14.98% +0.6149 +0.5960
ar
Euro/Swiss EURCHF= 1.0568 1.0587 -0.18% -2.62% +1.0604 +1.0547
Euro/Sterling EURGBP= 0.9110 0.9113 -0.03% +7.76% +0.9141 +0.9067
NZ NZD= 0.5920 0.6044 -2.05% -12.11% +0.6095 +0.5917
Dollar/Dollar
Dollar/Norway NOK= 10.4792 10.2773 +1.96% +19.37% +10.5870 +10.1672
Euro/Norway EURNOK= 11.5130 11.4940 +0.17% +17.07% +11.6020 +11.3240
Dollar/Sweden SEK= 9.9252 9.7811 -0.26% +6.18% +10.0071 +9.7309
Euro/Sweden EURSEK= 10.8848 10.9136 -0.26% +3.97% +10.9964 +10.8465