Weekly Currency Roundup
August 25-August 28, 2008
Local FX Market
This week, there was ample liquidity in the local market, and US dollar rose slightly against the Bangladesh Taka. The demand for dollar was steady.
Money Market
Overnight money market was steady as the market eased a little. The call money rate remained range bound within to 7.00-9.00 percent.
International Markets
In the beginning of the week, the British pound hit two-year lows against a broadly stronger dollar on Monday, with stalled UK economic activity seen as another example of growing economic malaise outside the United States. The UK growth scenario helped fuel a view that interest rates outside the United States may be headed lower, supporting the case for an extension of dollar's gains. The dollar surged broadly on Tuesday, hitting a six month high against the euro as the single currency tumbled after weak German data highlighted frailty in the euro zone economy, fuelling more speculation of a possible interest rate cut. Dollar retreated on Wednesday as dealers cashed in on the currency's jump the previous session to 2008 highs against a basket of currencies. But towards the end of the week, dollar slipped from a six-month high against the euro on Thursday after comments by European Central Bank officials the previous day scaled back speculation about an ECB rate cut. A rise in oil prices also supported the euro while the dollar was weighed down by troubles in the US.
Commodities
Crude oil and natural gas rose on a forecast that Tropical Storm Gustav will be the most damaging since Hurricane Katrina, forcing Royal Dutch Shell Plc and BP Plc to begin pulling workers from the Gulf of Mexico. Crude oil price increased almost $3 to 119.63 a barrel on Thursday from $116 towards middle of week. Gold prices also went up over the $837 an ounce mark as the dollar's decline may increase demand for the precious metal as an alternative investment.
- Standard Chartered Bank
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