Published by Global Banking & Finance Review®
Posted on March 10, 2026
1 min readLast updated: April 1, 2026
Add as preferred source on GoogleMoney markets are signaling heightened foreign demand for the U.S. dollar, with three-month euro–dollar basis swaps plunging to their lowest since April 2025 amid geopolitical shocks and energy-market volatility tied to the U.S.–Israel attack on Iran.
LONDON, March 10 (Reuters) - Money markets started to show signs of strain from this week's extreme volatility on Tuesday, pushing one measure of investor demand for dollars to its strongest since last April's "Liberation Day" turmoil.
Three-month cross-currency basis swaps for the euro, a derivative that reflects demand for dollars, hit their lowest since last April, at 0.625%, from around 6.4% late on Monday, according to LSEG data. The lower the number, the greater the demand among investors to hold dollars rather than euros.
This rate plunged to a low of -6.625% on April 7..
The euro itself has lost around 1.5% against the dollar since the U.S. and Israel-led attack on Iran on February 28. Even though volatility has surged across the broader markets, given the dramatic spike in the cost of oil and natural gas, currency volatility has remained relatively contained so far.
(Reporting by Amanda Cooper; Editing by Dhara Ranasinghe)
The three-month cross-currency basis swaps for the euro reflected the highest demand for dollars since April 2025, reaching their lowest level.
The euro has lost around 1.5% against the dollar since the U.S. and Israel-led attack on Iran on February 28.
While overall market volatility surged due to rising oil and gas prices, currency volatility, particularly for the euro and dollar, remained relatively contained.
The current dollar demand is compared to levels last seen during the 'Liberation Day' turmoil in April 2025.
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