Stress is evident in cross-currency basis swaps | 20 Marzo 2020
20 Marzo 2020, USD/JPY
USDJPY trading plan:
Stress, which is evident in cross-currency basis swaps, remains evident in the cost of borrowing dollars abroad. The premium over interbank rates that investors were paying to swap yen for one-year dollar funding was around 72 basis points, still close to the 2016 highs hit last week. Foreign borrowers with $12 trillion of dollar-denominated debt worldwide are hoarding as many dollars as they can in order to be able to service their debts. This is a positive signal for the U.S. currency.
Trading recommendation: Buy 109.30 and take profit 109.70.
The author's opinion reflects their personal view and is not an investment recommendation. The company is not responsible for any trading results based on the provided analytical data.
