The US dollar finally rose against a large number of currencies in developing countries in the first quarter this year.
The recent increase in the American currency was mainly due to new comments from US monetary authorities related to a possible return of inflation.
More important, the United States is accumulating deficits and needs raising short and long-term interest rates in order to attract lenders.
Although this is impossible to predict if the US dollar will further rise or could fall to lower levels than in the past year, low-cost countries clearly gained some advantage in the first quarter, especially to China.
While Chinese yuan was still pegged to the US dollar, Bangladeshi taka was down 8% in the first quarter after rising 3.4% in 2004.
Such a devaluation gives a clear advantage to Bangladesh as textile quotas are eliminated, helping domestic exporters in facing competition in the coming months.
Indonesia's rupiah fell 2.23% at the same time after already declining 9% in the past year, strengthening Indonesian exports to the United States.
Other suppliers in low-cost countries did not take advantage of such a fall in their currencies.
Vietnam's dong, Thailand's baht or India's rupee no more rose, however, giving their exporters a competitive advantage in the quota-free world.
A small number of countries are confronted with a dangerous strength in their currency, mainly Egypt, Sri Lanka and the Dominican Republic.
Already threatened by the removal in quotas, Sri Lanka is actually weakened by a surge in its currency.
Financial help that poured after a tsunami devastated the country actually boosted the rupee, further weakening Sri Lanka's exports.
Sri Lanka's rupee rose 5%.30% in the first quarter in US$ terms and was up more than 13% compared with the Bangladeshi taka.
After the euro finally fell against the US$ in the first quarter, nearly all currency values increased in euro terms.
If Bangladeshi taka is nearly 3% lower from the end of last year, other Asian currencies rose between 2% and 5.50%.
Indian and Pakistani rupees were up 5.46% and 5.66% respectively in the first quarter after declining 4% and 8% in the last year.
Honk Kong's dollar is also rising 5% after a 8% decrease in 2004.
Sri Lankan rupee is up more than 11% in Euro terms after falling 15% in the last year.
With UK's pound less rapidly falling than the euro, sales to the British market should be less affected.
A wide range of Asian currencies were only up 2.50% to 3% in the first quarter in pound terms with Sri Lanka's rupee rising 8%, however.
