Weekly Currency Roundup
February 22- February 26, 2009
Local FX Market
This week, the market was active and US dollar was stable against the Bangladesh Taka. The market was mostly liquid this week.
Money Market
Overnight money market was stable this week with ample liquidity. The call money rate was steady and settled near 8.50-9.00 percent range.
International Markets
This week the yen tumbled to a three-month low against the dollar and a seven-week low against the Australian dollar, as bets against it mounted aided by concerns about Japan's economic outlook. Data showing portfolio flows out of Japan last week underscored the yen's loss of favour as a safe-haven bid, with many now discussing how far it can fall as technical sell signals fuel negative yen sentiment. The yen has shed more than 10 percent since hitting a 13-year high of 87.10 yen per dollar in January, and short-term speculators have been forced to unwind bets that it would revisit that level, helping push the currency even lower. But a rebound in implied volatility for dollar/yen despite its rise towards 100 indicated that market players remained nervous about a sudden reversal in the yen's slide. Foreign investors sold a net 450.8 billion yen ($4.63 billion) of Japanese stocks last week, their biggest net weekly selling since November, capital flow figures showed. Also, Japanese investors were net buyers of overseas stocks and bonds. Analysts caution that not all of the foreign bond transactions by Japanese investors seen in the weekly data always involve currency transactions, but some say the numbers suggest there could be more momentum to the yen's fall in the short term.
-- Standard Chartered Bank
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