Weekly Currency Roundup

April 10-13, 2011
International Markets
This week the currency market continued to remain highly volatile. The yen slipped broadly while the euro edged up towards a 15-month high against the dollar on Wednesday as a bout of global risk reduction abated and investors sought currencies promising higher yield. The euro was lifted by reported demand from sovereign names looking to recycle dollar proceeds as the single currency remained supported by the prospect of further rate rises in the euro zone while policy stays loose in the United States and Japan. Commodity-linked currencies such as the Australian and New Zealand dollars also rose, buoyed by a recovery in commodity prices and stocks, while the yen -- the most popular funding currency to buy higher-yielding assets, the process known as carry trades -- retreated after gaining on Tuesday. The yen's downtrend was seen staying intact as long as risk appetite holds up. The negative impact on the economy of the recent massive earthquake was expected to ensure Japanese monetary policy remains ultra-loose for a prolonged period. The Japanese government's downgrading of its assessment of the economy for the first time in six months added weight to this view. Global equities and commodities recovered on Wednesday from falls the previous day, when an upgrade of the severity of Japan's nuclear crisis turned investors more risk-averse, prompting them to unwind some of their recent yen-funded carry trades. The Australian dollar was up 0.6 percent at $1.0501 to come closer to its recent 29-year high of $1.0585. It was up more than 1 percent versus the yen at 88.34 yen, regaining ground after a 1.8 percent slide on Tuesday.
Local Money Market
Call Money rates were steady this week, and mostly in the 10-12% range.
Local Market FX
USD/BDT rates were steady this week.
This document has been produced for the purposes of marketing and is not independent research.
Author: Shareq Husain, Associate, Financial Market Sales, Standard Chartered Bank
This memorandum is issued by Standard Chartered Bank and is based on or derived from information generally available to the public from sources believed to be reliable. While all reasonable care has been taken in its preparation no responsibility or liability is accepted for errors of fact or any opinion expressed herein.
-- Standard Chartered Bank