A Key Gauge Signals Waning Demand for US Dollar in $7.5 Trillion Market

From Yahoo!finance

A measure of demand in the $7.5-trillion-a-day foreign-exchange market is catching the attention of Wall Street, pointing to diminished appetite for the US dollar even during market turbulence that would otherwise send investors flocking to the greenback.

Analysts at a handful of banks including Morgan Stanley and Goldman Sachs Group Inc. all point to recent shifts in so-called cross-currency basis swaps — a gauge of how much it costs to exchange one currency for another beyond what would normally be implied by borrowing costs in the cash markets. As demand for a particular currency increases, that extra cost or premium rises, and likewise declines or even can go negative when appetite isn’t as strong.