Weekly Currency Roundup
March 27-31, 2011
The euro rose broadly on Thursday as above-forecast euro zone inflation cemented the case for gradual rate rises from the European Central Bank, though analysts cautioned against a rapid rise in the currency. Traders said significant quarter-end and fiscal year-end flows were helping to boost the euro, at the particular expense of the greenback. Eurostat estimated that consumer prices in the 17 countries using the euro jumped 2.6 percent year-on-year in March, up from 2.4 percent in February. Economists polled by Reuters had expected 2.3 percent. European Central Bank Executive Board member Lorenzo Bini Smaghi on Wednesday implied that the central bank's policy is to gradually raise interest rates, with markets expecting the tightening cycle to begin in April.
Anticipation that Japan would buck the global tightening cycle and leave interest rates low to support its quake-hit economy is encouraging players to sell the yen to fund higher-yielding investments, in a revival of the carry trade that flourished before the credit crisis began in 2007.
The Australian dollar hit a fresh 29-year high of $1.0348 after favourable retail sales and credit growth data.
The dollar index fell around 0.5 percent to 75.747, dented by month-end selling and the broad rise in the euro.
Local Money Market:
Call money rates eased off this week, as the liquidity situation improved
Local Market FX:
USD/BDT rates moved up this week.