Weekly Currency Roundup

July 6 – July 10, 2008
Local FX Market
This week, there was ample liquidity in the local market, and US dollar remained mostly steady against the Bangladesh Taka.

Money Market
Overnight money market was stable with rates remained stable through the week. Most deals ranged around 6.50 percent.
In the Treasury bill auction held on Sunday, bid for BDT 9,000.00 was accepted compared to BDT 9,000.00 last week. Weighted average yield moved slightly for all categories auctioned on the day.

International Markets
This week the dollar remained range bound against its major rivals, moving between 1.50-1.57 against the euro. The euro was dented early after data showing French industrial production dropped much more sharply than expected in May, hit by downturns in the automobile and energy sectors. A pick-up in geopolitical concerns gave safe-haven currencies like the Swiss franc a boost, while the high-yielding Australian dollar sagged, further pressured by a report showing consumer confidence at 16-year lows. But analysts said the Iran news was unlikely to have a long-lasting impact on a currency market worried about the global economic slowdown and surging inflation. Wariness remained over credit market turmoil however, as US shares slid on worries about financial institutions, with Fannie Mae and Freddie Mac, the two largest US mortgage funders, tumbling again on Wednesday on capital raising concerns. Sterling was struggling against the dollar and euro ahead of the Bank of England's interest rate decision. The BoE, like several other central banks, is facing the dual pressures of rising inflation and slowing growth -- widely expected to result in borrowing costs staying on hold at 5 percent. Inflation is at its highest since the BoE was given the power to set interest rates in 1997, and analysts are increasingly upping bets on Britain entering a full-blown recession because of a run of poor economic data.

Commodities
Crude oil traded little changed near $136 a barrel as Iran test-fired more missiles in the Persian Gulf today and a Nigerian militant group said it will end a cease-fire later this week. Iran has tested missiles capable of reaching Israel, heightening concern that conflict will cut oil supply. The Movement for the Emancipation of the Niger Delta said it will resume action because it objects to UK offers to help the government secure oil facilities. The IEA today raised its 2008 oil demand forecast for the first time in six months. Oil had reached a record high above $145 last week.