US Libor Falls to 3 Month Low on Safe Haven Bids

January 24, 2017 Share Print 0

The rate banks charge each other to borrow dollars for three months fell by the most in nearly four months on Tuesday, following a broad pullback in benchmark bond yields the day before on worry over U.S. President Donald Trump’s tough stance on trade.

The London interbank offered rate, or Libor, for three-month dollars USD3MFSR= was fixed at 1.03178 percent from 1.03789 percent on Monday, declining for a second straight day and by the most since Sept. 28.

The rate has declined by 1.333 basis points since peaking Friday at the highest since April 2009. Libor breached 1 percent earlier this month after more than seven-and-a-half-years below that mark. Traders expect Trump’s economic policies will accelerate economic growth and inflation.

Many investors have begun recently to reassess those expectations amid actions by the new administration to restrict trade and with few details yet available about proposed tax cuts, infrastructure spending and deregulation.

via Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.