Weekly Currency Roundup
May 29 -June 2, 2011
The euro rose to a one-month high against the weak dollar, boosted by expectations of a quick-fix solution to the Green debt crisis, although gains could be checked by investors selling into the bounce. The euro clawed back ground even after Moody's cut its credit rating for Greece deep into junk territory. Traders said a major Asian sovereign account was a seller around the highs with further stops highlighted on a break of $1.4500, while option barriers rolling off this month are layered up to $1.4700. The US dollar was under pressure against the safe-haven Swiss franc hitting record low of 0.8383 on Wednesday. The dollar fell after data on Wednesday showed US companies hired far fewer workers than expected in May and that output in the manufacturing sector slowed to its lowest since 2009. Analysts said a poor US non-farm payrolls number on Friday could trigger more dollar losses and fuel speculation about the need for more monetary stimulus measures after a second round of quantitative easing by the Federal Reserve ends this month.
Local Money Market:
Call money rates were in a lowered territory this week compared to last week and ended the week in the 8.50-9.50% range.
Local Market FX:
USD/BDT rates slowly but steadily edged up this week but there was enough liquidity to support the market.