The continued broad depreciation of the US dollar and its subsequent partial reversal were the salient features of foreign exchange markets in the 2004 financial year, the Bank for International Settlements (BIS) said in its annual report released on Monday.

In 2004, the dollar again depreciated against the euro, the yen and a number of other floating currencies, it said, adding a new development last year was that the dollar also lost ground against several emerging market currencies in Asia.

However, since January 2005, the dollar's downward trend has been partly reversed, it said.

BIS identified three main factors underpinning exchange rate movements.

The first is market participants' focus on the widening US current account deficit and on rumors of changes in the currency composition of Asian central banks' portfolios.

The second is shifting expectations for relative output growth and interest rate changes and the third is the official foreign exchange reserve accumulation in Asia.

The Basel-based BIS is an international organization which fosters international monetary and financial cooperation and serves as a bank for central banks.

Established in May 1930, BIS is the world's oldest international financial organization.

Source: Xinhua