Weekly Currency Roundup
December 6th-December 10th, 2009
This week the USD posted significant gains against the euro and the pound. Early in the week USD soared buoyed by positive jobs data, with the US Nov job losses only at 11,000 compared with the forecast of 130,000. On Monday, the dollar index had hit a 5-week high. On Tuesday the euro took another massive hit after Fitch cut Greece's rating. Fitch Ratings cut Greece's debt rating to BBB+ from A- with a negative outlook, the first time in 10 years a major ratings agency has put Greece below an A grade, citing fiscal deterioration in the euro zone's weakest member. By Wednesday the euro had fallen to a one month low against the dollar as investors unwound positions in riskier assets ahead of the year end, prompted in part by rising debt woes for Greece and Dubai. Worries about Britain's fiscal health continued to pressure the sterling which had slid to an eight week low against the dollar. The euro dipped against further against the dollar on Thursday on concerns over the poor fiscal health of Greece and Spain highlighted by rating agencies in recent days. The Australian and New Zealand dollars jumped, however, on expectations of higher interest rates after strong Australian jobs data and as the Reserve Bank of New Zealand signalled rates there may go up sooner than thought. Standard & Poor's cut Spain's credit outlook to negative on Wednesday after Fitch had downgraded Greece's credit rating, sparking concerns about sovereign debt and highlighting the troubles facing some countries on the euro zone periphery. This could mark a switch from the recent trend for currency markets to trade on the basis of risk sentiment, where the euro tended to gain in tandem with perceived higher risk currencies such as the AUD.
Local Money Market
The call money rate traded in the range of 4-4.5% the week.
Local Market FX
The USD posted gains against BDT this week, after there was pressure on liquid due to some large payments that took place.