The pressures have abated and are not really flaring up for now
Or at least that is what the basis swaps are suggesting, as we even see the EUR/USD 3-month basis swap spread move to favour the euro currently. As for the yen-dollar basis swap spread, it has turned normal-er somewhat after having blown up over the past two weeks.
Just be wary though that this is just one area to look out for in terms of dollar funding pressures but the good thing is that it looks like the swap lines by the Fed are doing the work, alongside their action to backstop the US economy and financial risks in the market.
We'll have to see if the unwinding in the dollar still has more room to run, and in that regard I'd keep an eye on the key technical levels in EUR/USD and USD/JPY amid the slight dollar recovery we are seeing to kick start the new week.
