LONDON, March 10 (Reuters) - Demand for U.S. dollars in
the currency derivative markets surged on Friday to its highest
since mid-December, after a meltdown in U.S. banking stocks
ignited a wave of investor risk aversion.
Three-month euro/dollar cross currency basis swap spreads
traded as negatively as -17 basis points , the
most since December 14, reflecting a pickup in demand for hard
cash. They were last trading at -14.
An index of European banks was heading for its
biggest one-day fall since last June, as shares in the region's
biggest lenders dropped in sympathy with a steep decline in the
value of Wall Street's biggest lenders on Thursday.
(Reporting by Amanda Cooper; Editing by Dhara Ranasinghe)
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