July 19- 23, 2009
International Markets
The currency markets were largely driven by US corporate earnings news as well as the Federal Reserve Chairman's testimony to the senate. Uncertainty surrounding US corporate outlook supported the USD and the yen early in the week. Risk sentiment however improved from Monday as the last minute rescue deal for CIT Group, shored up investor confidence. At the end of the week, the dollar had edged closer to a seven-week low against the euro and a basket of currencies.
Yen stumbled across the board, undercut by expectations of investment trust flows out of Japan this week and as gains in the euro set off automatic sell orders in other yen pairs. Sterling, New Zealand and the Australian dollar rose against both the dollar and the yen. With few major economic events or data scheduled in Europe on Thursday, investors will look to second-quarter earnings from US and European firms, including American Express, as well as data on US jobless claims and existing home sales.
Risk appetite has been improving in recent days, fuelled by strong quarterly results from some large banks including Goldman Sachs, although results from Morgan Stanley on Wednesday were disappointing. Traders said Federal Reserve Chairman Ben Bernanke provided little market-moving news on Wednesday in testimony to the Senate Banking Committee.
Bernanke reiterated that the US economic outlook was improving but supportive policies would be necessary for a while to prevent rising joblessness from sapping economic recovery
Local Money Market
The call money rate traded at very low rates this week and was in range of .1- .25. A few stray deals traded were done at higher rates. Excess liquidity was the cause of such low rates.
Local Market FX
The USD remained steady against the BDT throughout the week. The market was active and there was ample liquidity.