Local FX Market
US dollar lost some ground against Bangladeshi taka throughout the week. Lower demand for import payments and ample supply of greenback drove the dollar lower.

Money Market
Bangladesh Bank issued BDT 1,017.00 million by the Treasury bill auction held on Sunday, compared with BDT 6,892.00 million in the previous week's bid. The weighted average yields of t-bills of different tenors were almost unchanged from the previous bid.

Call money rate was broadly on a downward trend this week. The rate was 5.00-6.00 percent in the beginning of the week, rose to 8.5 percent in the middle and continued to slide for the rest of the week and ended the week at 4.00-4.50 percent.

International FX Market
In the beginning of the week, the dollar slipped from last week's three-week highs against the euro on Monday as the market awaited data to see if it supported Federal Reserve chief Alan Greenspan's recent optimism on the US economy. After the dollar rose around 3 percent against the euro, Swiss franc and sterling following Greenspan's testimony in Congress, dealers were still trying to assess how much of the move was short covering after a steep dollar selloff in previous weeks. Consumer confidence on Tuesday, durable goods on Wednesday and gross domestic product on Friday will be key tests for the dollar after Greenspan said last week that recent weaknesses in the economy were transitory, indicating interest will need to go further.

The dollar held near multi-week highs against major rivals in the middle of the week after a boost from a stronger-than-expected consumer confidence report suggested that a recent soft patch in the US economy could be short-lived. The Conference Board's index of US consumer confidence rose to 106.1 in July, beating forecasts and sparking a resumption of a rally in the dollar that began last week after upbeat comments on the US economy from Federal Reserve Chairman Alan Greenspan. While the latest data confirmed market expectations for another US interest rate rise in August and lent support to the dollar, it also left investors seeking fresh factors to trade on. On New York trade, dollar reached six-week high. Euro hit five-week low against the US dollar in New York trade.

US dollar reached 2-month high against the yen and six-week high against the euro on back of robust US consumer confidence data. Positive economic data has reassured the market that the recent pause in US recovery is short-lived and thus raised expectation of US rate hike in the August 10 FOMC meeting. The market is now looking forward to the release of initial US jobless claims, employment cost index and gross domestic product later this week -- all of which are expected to support the dollar's strength. News that Japan's industrial production fell 1.3 percent in June from May undermined the yen.

- Standard Chartered Bank