US Dollar Index surges, rates rise, after Reuters breaks news on LIBOR changes

Reuters sent the U.S. dollar index surging on June 18 when it broke news that the British Bankers Association is readying changes to how it calculates LIBOR, the world’s most widely monitored interest rate used in more than $350 trillion of financial products. BBA told Reuters it will let new banks apply to join the elite panel, a move that could push up the benchmark money market rate. US Treasury prices tumbled, pushing up the yield. The BBA has faced intense criticism over LIBOR and the news was hotly anticipated by market participants. It took Dow Jones 36 minutes to match the Reuters story while Bloomberg trailed by over an hour. The story was the talk of the money markets and spurred commentary in research reports. Reuters followed up the next day with further details, explaining how banks outside London may be able to join the panel, but any change would be gradual and first they will have to submit prices for a period of time before joining.