Demand for US dollar was high in this week and USD remained bullish against Bangladeshi taka.

Money Market
In the Treasury bill auction held on Sunday, bid for BDT 9,338.00 million was accepted, compared with total of BDT 12,630.00 million in the previous week's bid. Weighted average yields increased for longer term bills, while remained unchanged for 28-D bill.

Overnight call money market eased this week after the Eid-ul-Azha. The rate ranged between 20.00 and 30.00 percent in the beginning of the week. The rate eased throughout the week and ended the week at 9.00-10.00 percent.

International FX Market
The dollar drifted towards a three-month low against the euro on Monday after comments on Friday by European Central Bank President Jean-Claude Trichet kept alive market expectations for Euro zone interest rates to rise in coming months. However, currencies hugged narrow ranges, with market players reluctant to take big positions in thin trading volumes and with the United States on holiday for martin Luther King day. The dollar was up 0.30 percent on the day against the yen but down slightly against the Swiss franc. Data on Sunday showed that China's foreign exchange reserves soared to a record $818.9 billion in the fourth quarter, supporting Asian currencies against the dollar. Some in the market said that the swelling figure could bolster the argument by critics, mainly in the United States, that China should free up the yuan even more after Beijing revalued the currency last July. Investor reluctance to take big positions amid heightened geopolitical tensions could also weigh on the US currency.

The dollar lost footing in European trade in the middle of the week as rising global risk aversion, triggered by a slide in Japanese stocks and high oil prices, kept investors nervous ahead of key US capital flows data. The Japanese yen steadied after testing a 12-day low against the dollar and the euro after the Tokyo's Nikkei share index fell nearly five percent at one stage and trading was halted some 20 minutes earlier than normal. But disappointing quarterly results from US bellwether technology stocks and a jump in oil prices as militants threatened new attacks on Nigeria's oil industry led markets to worry about the impact of rising risk aversion on the global economic outlook. Dealers were also awaiting the reading for the US consumer price index, due at 1330 GMT to judge whether the Federal Reserve may continue to raise interest rates after an expected rise later this month. Core CPI for December is seen showing a rise of 0.2 percent from a month earlier after climbing the same amount in November.

The dollar shuffled in a tight range against the yen on Thursday as dealers tried to fathom the effect on currencies from huge swings in the Japanese stock market. After losing more than 5 percent in the previous two days, the benchmark Nikkei stock average was up 2.3 percent by the end of Tokyo trade on Thursday, the rollercoaster ride in stock prices has done little to bust the dollar/yen out of its recent range, leaving traders scratching their heads as to how the Nikkei's swing would affect the Japanese currency.

- Standard Chartered Bank