Money Market
In the Treasury bill auction held on Sunday, bid for BDT 1,589.00 million was accepted, compared with total of BDT 5,964.00 million in the previous week's bid. Weighted average yield was unchanged.

Overnight money market was more or less steady throughout the week. The call money rate ranged between 11.00 and 12.00 percent at the beginning of the week but ended the week on a high of 14.00-20.00 percent.

International FX Market
The dollar began the week by being down around 8.0 percent against the euro since the beginning of 2006. A smaller-than-expected $62 billion March US trade deficit failed to lower investor concerns about underlying structural problems in the US economy. The dollar had fallen earlier to one-year lows against major European currencies (the euro, Swiss franc, sterling) but reduced some losses after news of the smaller trade gap. However the recovery was only short-lived and the dollar is again at a one year low against the major currencies. By Monday, the dollar rose against the yen, euro and commodity currencies as investors sold gold, stocks and emerging currencies and bought back the greenback which had been under pressure for many weeks.

In the middle of the week, the euro lost ground and wiped out earlier gains against the dollar, after data showed German investor sentiment fell sharply in May. Traders said the market were paying close attention to the US producer price index for April for clues about the Fed's next move. The Fed has lifted its funds rates at all 16 monetary policy meetings since June 2004, helping the dollar to rise around 15 percent against the euro and the yen last year. However, the dollar's rate advantage was widely expected to narrow in coming months on expectations the European Central Bank will lift rates in June and the Bank of Japan will boost rates from near zero during the July-September quarter.

The dollar again fell and hit an 8-month low against the yen on Wednesday, on a growing market view that it needs to fall to correct imbalances in the global economy. Dollar trading has been volatile, taking a cue from fluctuating prices for commodities and stocks, but most in the market forecast the dollar will keep falling on expectations that its rate advantage will narrow in coming months. The dollar also came under pressure as tensions between Iran and the West over the country's nuclear programme escalated, some analysts said.

By the end of the week, however the dollar halved the previous stellar gains as investors awaited clues on US interest rates from Federal Reserve officials due to speak later, in the wake of stronger-than-expected US inflation data.

-Standard Chartered Bank