FOREX-Dollar eases as central banks pledge dollar liquidity

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar eases after ferocious rally
* Cross currency swaps show continuing strains

(Adds quote, updates prices)
By Karen Brettell
NEW YORK, March 20 (Reuters) - The dollar eased on Friday as
six major central banks announced a coordinated action to
enhance liquidity in the currency, but bounced off its lows in
afternoon trading as stocks weakened.
The greenback has staged a ferocious rally this week as
investors scrambled to obtain the currency, gaining 4.32% in its
biggest weekly rise since the 2008 financial crisis.
Currencies from the Australian dollar AUD= to the British
pound GBP= tumbled to multi-year lows after coordinated rate
cuts by central banks and billions of dollars of fund injections
failed to calm panicky markets.
On Friday six major central banks announced coordinated
action to enhance liquidity in the greenback by increasing the
frequency of their currency swap operations to occur daily.
"The enhancement of coordinated USD dollar liquidity
operations on 15 March was already a significant step building
on the experience of the Great Financial Crisis, but today's
shift to daily operations is unprecedented," said Frederic
Ducrozet, a strategist at Pictet Wealth Management.
The U.S. dollar rose to 1.03, the highest since January
2017, against a basket of currencies =USD through a week when
investors have liquidated everything from stocks to bonds to
gold and commodities.
It was last 102.65, down 0.32% on the day.
“For many countries with borrowings in dollars, the massive
depreciation in their domestic currencies, and strength in the
dollar, has been increasingly threatening at a time when most
emerging market and developed-world economies are either headed
to or are already in recession,” analysts at Action Economics
said on Friday in a report.
Gauges of expected market swings in the euro for one-month
maturities EUR1MO= edged lower, after hitting a more than
three-year high on Thursday.
Some funding indicators, however, showed continuing strains
in the market.
The premium over interbank rates that investors were paying
to swap yen for one-year dollar funding JPYCBS1Y= fell on
Friday but remained at elevated levels at around 55 basis
points.
The FRA-OIS spread USDF-O0X1=R , a barometer of risk in the
interbank market, edged higher on Friday to 99 basis points.
"While FX volatility is lower and currency basis swaps are
less scary for example, the situation remains stressed," said
Kit Juckes, a strategist at Societe Generale in London.
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Currency bid prices at 4:00PM (2000 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.0669 $1.0690 -0.20% -4.84% +1.0831 +1.0638
Dollar/Yen JPY= 111.1100 110.6900 +0.38% +2.06% +111.5000 +109.3200
Euro/Yen EURJPY= 118.53 118.35 +0.15% -2.80% +119.2900 +117.8600
Dollar/Swiss CHF= 0.9873 0.9858 +0.15% +2.01% +0.9903 +0.9746
Sterling/Dollar GBP= 1.1582 1.1485 +0.84% -12.65% +1.1932 +1.1414
Dollar/Canadian CAD= 1.4394 1.4510 -0.80% +10.84% +1.4536 +1.4151
Australian/Doll AUD= 0.5805 0.5741 +1.11% -17.32% +0.5986 +0.5666
ar
Euro/Swiss EURCHF= 1.0531 1.0541 -0.09% -2.96% +1.0557 +1.0527
Euro/Sterling EURGBP= 0.9209 0.9308 -1.06% +8.92% +0.9338 +0.8998
NZ NZD= 0.5687 0.5671 +0.28% -15.57% +0.5880 +0.5613
Dollar/Dollar
Dollar/Norway NOK= 11.6938 11.2486 +3.96% +33.21% +11.9357 +10.8044
Euro/Norway EURNOK= 12.5795 12.0280 +4.59% +27.87% +12.7980 +11.6061
Dollar/Sweden SEK= 10.4134 10.3884 +0.02% +11.40% +10.4290 +10.2151
Euro/Sweden EURSEK= 11.1070 11.1048 +0.02% +6.09% +11.1356 +10.9785