That is something to consider when you look at how cross currency basis swaps are behaving. The EUR/USD 3-month cross currency basis is at its widest spread in roughly eight weeks while the yen-dollar 3-month basis has also widened by the most in nearly two months now.
Putting the pandemic blip aside, the conditions above reveal that the market is rather tight at the moment when it comes to dollar funding. That might be pointing to a sign that there is some stress/shortage of dollars.
The fact that we also have the Fed coming up next week (set to be more aggressive) against the backdrop of the BOJ this week (reaffirming ultra easy policy) doesn't really help the above conundrum.
I wouldn't say this is too big a factor yet but it is something worth keeping an eye out for considering the recent surge in the dollar.
