Spreads, Basis, and the USD and AUD

Posted on April 5th, 2018

What does the widening in USD and AUD LIBOR/OIS spreads and higher cross-currency swap basis mean for their exchange rates?  Some have argued that the implied tightening in financial conditions in their home countries may delay central bank rate hikes and undermine their exchange rates.  But this seems to ignore the fact that the spread […]