Weekly Currency Roundup
October 30-November 04, 2004
Local FX Market
US dollar was strong against Bangladeshi taka earlier this week on back of higher import demand. But at the end of the week, increased supply of dollar pulled the rate down against Bangladeshi taka.Money Market
Bangladesh Bank borrowed BDT 6,053.00 million through the Treasury bill auction held on Sunday, compared with BDT 8,233.00 million in the previous week's bid. No significant change was seen in the weighted average yields of t-bills of different tenors from the previous bid. Call money rate was volatile in this week. The rate ranged between 2.25 and 2.50 percent in the beginning of the week. The rate rose subsequently and ended the week at 4.00-5.00 percent. International FX Market
The dollar nudged up from a six-month low against the yen on Monday as investors sought bargains after its recent sell-off, but uncertainty about the outcome of the US presidential election capped its recovery. A close race between US President George W. Bush and Democratic Senator John Kerry had heightened worries that deciding the winner of Tuesday's election could drag on as it did in 2000, encouraging investors to stay relatively light of dollar positions. US payrolls data on Friday could also be crucial for the dollar, which was trading less than 2 cents from record lows against the euro. The dollar strengthened against the yen and euro in the middle of the week after US television networks projected that President George W. Bush had won the key states of Florida and Ohio and was nearing victory in the US election. A Bush victory was seen as more positive for the dollar in the short-term than a victory by Democratic challenger Senator John Kerry, who markets thought would be more aggressive in pushing for Asia to accept currency strength. The euro lost more than half a cent against the dollar as the market factored in a Bush win. Dollar was also stronger against the yen. The dollar hit eight and half month low against the euro on Thursday after the spotlight quickly swung back to the US economy and the growing US trade gap once the presidential election was over. The dollar came under pressure due to speculation that the administration of President Bush would tolerate a weaker dollar to help narrow the trade deficit. Analysis see the yen benefiting from the dollar's vulnerability, depending on oil and stock prices. But the market is also nervous that Japan might intervene to prevent the rise of yen for protecting their export-led economic recovery. - Standard Chartered Bank
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