The Cross-Currency Basis: Why It Exists and Won't Go Away

The Trading Floor with David Axtell · Sep 29, 2026 · 14m

There's a number quoted daily on every major currency pair that, in theory, should be zero. It isn't, and hasn't been for nearly two decades. Episode five is the conceptual centre of the season: what the cross-currency basis measures, why covered interest parity broke in 2008 and never fully healed, and why it persists — balance-sheet costs and one-way hedging demand, not textbook mispricing. Host David Axtell proves with the book's own figures why a visible basis is not free money, and can turn a 15bp "pickup" into a six-figure loss. Companion season to Cross-Currency Swaps and Basis…