Local FX Market
US dollar eased substantially against Bangladeshi taka in this week. Increased supply of USD helped to improve the liquidity position of the market.

Money Market
Bangladesh Bank issued BDT 5,415.50 million by the Treasury bill auction held on Sunday, compared with BDT 2,809.00 million in the previous week's bid. The weighted average yields of 28-day t-bills fell by 4 bps, while the rate of other tenors were unchanged from the previous bid.

The call money rate was in slightly upward trend this week. In the beginning of the week the rate ranged between 2.50 and 3.00 percent. The rate increased later to end the week at 3.00 and 4.50 percent.

International FX Market
The dollar recovered ground against the euro and the yen on Monday as investors grew cautious of extending the greenback's recent losses ahead of a meeting of the US Federal Reserve later this week. The US central bank was widely expected to raise interest rates for the first time in four-years on Wednesday, marking the beginning of a measured campaign to ward off inflationary pressure in the fast the fast-growing economy.

The dollar gained against the yen and Euro on Tuesday after weaker than expected Japanese industrial output but the market was largely playing a waiting game ahead of this week's US rate decision. Japanese output rose by 0.5 percent in May from April, less than forecast which tempered expectations for an upbeat reading of the Bank of Japan's "tankan" business survey this week and took the yen down over half a percent on the day on the dollar. Some analysts, however said the data were far from discouraging and noted the market was unlikely to see much action before the US Federal Reserve long-awaited interest rate decision on Wednesday.

The yen fell broadly on Wednesday while the dollar struggled versus European currencies ahead of a US interest rate decision later in the day and the bank of Japan's "Tankan" survey of business sentiment this week. Markets were keenly awaiting the Fed statement that will accompany its expected 25 bps rate hike due at 1815 GMT, and will scrutinize it for clues on how aggressively US rates will rise later this year. Against the Euro, the dollar lost almost a third of a percentage. A 25 bps rate hike has long been factored in the market. If the Fed statement provides no surprises, the market will keep its expectations for mild tightening through a series of 25-bps increases, and the dollar will likely fail to get any sharp boost.

-Standard Chartered Bank