Money Market
Overnight money market was flat this week. The call money rate was range bound and most of the deals ranged between 6.50 and 6.60 percent throughout the week.

International FX Market
This week saw a technical correction in favour of the dollar, as it recovered from its record low versus the euro and multi year lows against the sterling. The yen however recovered against the dollar after investors started to unwind their risky carry trade positions.

US Dollar
The US dollar recovered from its record low of 1.3850, after a sharp technical correction. Worries about the ongoing problems in the US subprime mortgage market have led investors to reverse their position on riskier assets such as foreign stocks. Analysts said that the US currency could continue to benefit from heightened risk aversion, as US investors repatriate cash after exiting risky position.

Euro
The euro fell against the dollar and the yen, after the technical correction, but near the end of the week remained steady above $1.36. The ECB has held its interest rate steady this week, but may indicate for a rate hike in September.

Yen
The yen gained ground against the US dollar, as investors were reversing their carry trade positions. Carry trade involves borrowing low interest bearing currencies such as the yen and invest in the high yielding currencies such as the US dollar and the euro.

- Standard Chartered Bank