Weekly Currency Roundup
August 31 September 4, 2008
Local FX Market
This week, there was ample liquidity in the local market, and US Dollar was stable against the Bangladesh Taka. The demand for dollar was steady.
Money Market
Overnight money market was mostly steady. The call money rate remained range bound within to 6.00 - 8.5 percent.
International Markets
In the beginning of the week the dollar was on track to close out August with its best monthly rise in more than a decade on Friday as investors reacted to a slew of solid U.S. economic news for the week. On Monday Sterling fell versus the dollar to its lowest level in more than two years and slid to a record low against the euro on Monday, after Britain's finance minister said the country's economic downturn might be the worst in 60 years. The dollar approached an eight-month high against a trade-weighted basket of currencies. The dollar hit an eight-month high against a basket of major currencies on Tuesday, getting a boost from a sharp drop in oil prices on expectations that Hurricane Gustav's damage to U.S. energy facilities may be less than feared. Oil price has dropped from $116 to below $108 per barrel. The dollar continued its winning run on Wednesday, soaring to an 11-month high against a basket of major currencies as investors increasingly put faith in the U.S. unit amid a deteriorating global economic backdrop. The dollar held steady against the euro on Thursday, having come off an eight-month high hit the previous day as investors squared positions ahead of an interest rate decision by the European Central Bank.
Commodities
Crude oil price went down below $110 a Barrel this week but rose for the first time in five days on Thursday as Hurricane Ike gained force in the Atlantic and the dollar declined, boosting the appeal of commodities as a hedge. Gold rose towards the end of the week for the first time in five sessions in London as buyers replenished stockpiles and the dollar's decline against the euro buoyed demand for the metal as an alternative investment. Lead rose the most in a week on signs of purchases by car battery makers before their busiest time of the year. Aluminum advanced, halting the longest drop since 2001. India, the world's biggest producer of rice after China, partly lifted a six-month old ban on exports of some premium quality grain as the country is set to harvest a bumper crop for a second year.
-Standard Chartered Bank
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