Aussie rose on Friday. What about European currencies?

The Australian dollar jumped by 3.4% on Friday after tumbling to multi-year lows this week. Analysts warn that it was too early to call an end to the rout. But after the days of selling, the forex market was much calmer today.

Almost all currencies, except the U.S. dollar, collapsed this week, after billions of dollars of fund injections and coordinated rate cuts by central banks failed to calm panicky traders.

The U.S. dollar rose about 3.5% against a basket of currencies during the week after investors have liquidated everything from stocks to gold, bonds, and commodities. As a result, the dollar skyrocketed by more than 5%, showing its biggest weekly gain since October 2008.

However, the currency eased on Friday after a rally, as a global scramble for funding sent other major currencies reeling.

Kit Juckes, a strategist at Societe Generale in London, stated that while FX volatility is lower and currency basis swaps are less scary, for example, the situation remains stressed.

Euro rose. What about the Sterling?

The euro rose more than 1% to $1.0832, being one of the major gainers. However, gauges of expected market swings in the euro for one-month maturities lowered insignificantly. Currency swap spreads eased where most of the funding pressure in dollar markets was evident.

Sterling also increased by 3.3% to $1.1878 from a 35-year low. Stuart Oakley, a Singapore-based executive with Nomura, noted that people are selling everything, and the common thread is they want cash. According to him, people don’t know where their next revenue is coming from, and they’ve got payments to meet. That’s why they prefer to get cash, and that’s not going to change soon.

Cross-currency basis swaps, showing the cost of borrowing dollars abroad, indicate that strains remain so far. Euro cross-currency basis swap spreads are also wide. The premium over interbank rates, on the other hand, was around 68 basis points, close to the 2016 highs hit last week.