Sept 19- 23, 2010
This week the markets moved strongly after the FOMC statement, which indicated that the US economy was performing poorly, and further easing policies would take hold.
The USD was broadly sold, especially the EURO bounced strongly after the news.
The dollar steadied on Thursday after sharp selling the previous day when the US Federal Reserve hinted at more easing, pushing Treasury yields down and keeping the greenback pinned near a five-month low on the euro. Market players sold dollars as they positioned for more US quantitative easing later this year.
A survey of purchasing managers showing growth in Germany's private sector slowed sharply in September also hit the euro.
The dollar index steadied at 79.934 after hitting a six-month trough of 79.560 on Wednesday. Some chartists see a move down to last December's interim peak at about 78.45. Against the yen, the dollar rose 0.1 percent at 84.61 yen after falling to 84.27 yen, its weakest since Tokyo intervened in the currency market last week.
Markets in Tokyo were closed on Thursday for a national holiday. "The yen would be a lot stronger if not for intervention and the threat of intervention.
The drop in short-term US yields is more consistent with 80 yen rather than 85 yen," BTM-UFJ's Hardman said, adding he expected Tokyo to come into the market again at around 82-83 yen.
The dollar had fallen to a 15-year low of 82.87 yen before Tokyo intervened in the currency market for the first time in six years on Sept. 15.
Local Money Market
The call money rates were stable this week mostly trading around 4.5-6.5%. Rates eased off as the week progressed.
Local Market FX
USD/BDT moved sharply higher this on the back of strong demand in the inter-bank market.
-- Standard Chartered Bank
Sept 19- 23, 2010