Weekly Currency Roundup
April 29-May 03, 2007
Local FX Market
The demand for US dollar was high throughout the week. Higher demand caused the USD to rise against the Bangladeshi taka in this week.Money Market
Overnight money market was flat throughout the week. The call money rate was range bound throughout the week and most of the deals ranged between 6.75 and 7.25 percent. International Market
The euro retreated from last week's record highs versus the dollar and yen during the beginning of the week, as investors took profits ahead of euro zone data which are still likely to confirm expectations of more interest rate hikes. The yen strengthened broadly in thin trading, with Japanese financial markets closed for the first of a string of Golden Week holidays on Monday. Many markets in Asia and much of Europe will be shut for holidays on Tuesday. Expectations of at least one more rate hike by the European Central Bank, boosted by a run of robust data, have helped the euro rally at a time when US rates are expected to be cut and Japanese ones are forecast to remain ultra low for some time. The yen also got a bit of a boost on news that China's central bank on Sunday boosted the amount of reserves banks are required to set aside, the seventh such increase since June. While at the end of the week, the euro hit a record high versus the yen on Thursday on a view that euro zone finance ministers are unlikely to complain about the currency's strength, while the dollar dipped before a US service sector survey. Trading was thing with Tokyo markets shut for a holiday, leaving investors to wait for US data that could give more clues about whether the Federal Reserve would cut interest rates later this year as markets expect. Sources clise to the Eurogroup commented on Wednesday that euro zone finance ministers are likely to stay calm on the Euro's strength when they discuss the issue at a Brussels meeting on next Monday. The remarks follow recent upbeat data from the euro zone which reinforced expectations for a June interest rate hike from the current 3.75 percent and perhaps more later this year. US dollar hit a 2-month high on Wednesday against yen before steadying against the Japanese currency. -Standard Chartered Bank
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