August 1- 5,2010

International Markets

This week the trend of dollar weakness continued to prevail in the market, which is a massive turnaround from earlier in the year, when the EURO was drastically falling and getting closer to parity. But with pessimism about the anemic recovery of the US economy reflecting back in the Fed Reserve Chairman's comments which have suggested that rates in the US will continue to remain low for an extended period of time has been very dollar negative. However on Thursday the dollar steadied after it enjoyed a rare rally the previous day when U.S. data beat expectations and sparked a bout of short-covering, although the overall mood remains bearish ahead of a key payrolls report. Against the yen, the dollar was down 0.1 percent on the day, having bounced from an eight-month low hit on Wednesday. Traders said the greenback's ability to hold above the psychologically and technically key 85 yen level lightened the risk of dollar/yen dropping to a 15-year low below the November trough at 84.82 yen, at least until the monthly U.S. jobs data, which is seen setting the dollar's near-term direction. A decline beyond the November milestone could open the way for the greenback to slide to an all-time low below 80 yen, hit 15 years ago, traders said. Dealers are wary that a tumble to a 15-year low would finally prompt the Ministry of Finance into taking action on the currency's strength, One standout was strength in currencies leveraged to world growth and commodity prices, such as the Australian and Canadian dollars, suggesting a lightening of the recent gloom over the global outlook

Local Money Market

The call money rates climbed up this week.

Local Market FX

USD/BDT was relatively stable this weekThis document has been produced for the purpose of marketing and is not independent research. Author: Shareq Husain, Associate, Financial Market Sales, Standard Chartered Bank. This memorandum is issued by Standard Chartered Bank and is based on or derived from information generally available to the public from sources believed to be reliable.

- Standard Chartered Bank