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GBPUSD Analysis

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UK

GBPUSDDaily

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Since the break of 1.53295 support level on 23, September. GBPUSD has broken 1.51683 three times but was unable to sustain it or to establish a decisive price action below that level.

I won’t be quick to paint a broader bearish outlook as long as 1.50776 support level that was established in April this year holds but its break will see more selloff and turn the pair outlook downward, which should give us 1.49540.

Though, considering positive economic data coming out of UK, like current account deficit reduction from £24 billion to £16.8 billion beating expected £22.2 billion, I am incline to think we might not see reasonable downside yet, hence, a break of 1.50776 is needed to confirm further bearish.

But on the upside, a sustainable break of 1.51683 should give us 1.5329, above 20 days moving average and 1.55999.

The UK deficit is important for two reasons, it shows exports is picking up compared with what was widely believed that exports will remain poor due to strong GBP. Two, the data shows that UK economy is 5.9 percent above pre-cession peak, 0.7 percent more than previously estimated 5.2 percent.

On the other hand, US economy has been showing stronger economic growth with increased in job creations and surge in personal incomes which is fueling consumer spending, the main catalyst of the US economy since export is still largely on the downside. This explain the low volume on GBPUSD pair.

Maybe it is better to trade any of these currencies against weaker currencies, like I am doing with EURGBP.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Naira

Dollar to Naira Exchange Rate Today, Thursday, September 16, 2021

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Naira - Investors King

Naira continued its downward trend against other currencies on Thursday as it plunged to N562 against the United States Dollar at the black market. The local currency traded at N760 and N648 to British Pound and Euro, respectively.

Persistent forex scarcity amid a series of in effective policies have made access to forex impossible for most of businesses that operates in largely import dependent African biggest economy.

Nigeria’s forex reserves, the means in which the nation, service its dollar consuming 200 million population has been on a decline in recent weeks despite crude oil trading at over a year high of $73 a barrel. Some of the factors that have crippled the ability of central bank to cushion the economy with enough forex is low crude oil production, partly due to production cap, weak local manufacturing sector that has made the nation a huge import dependent economy, the ongoing crisis between herders and farmers, rising costs even with falling inflation, etc.

At the bureau de change section, Naira exchanged at N555, N765 and N645 to a United States Dollar, British Pound and Euro common currency.

The Central Bank of Nigeria (CBN) had stopped the sale of forex to the bureau de change operators to plug forex leakages and curb activities of criminal elements, the decision has worsen forex availability. See other forex rates below.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
16/09/2021 552/562* 754/760* 640/648* 70/75 430/440 310/330
15/09/2021 552/562 754/760 640/648 70/75 430/440 310/330
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
16/09/2021 548/555 753/765 635/645
15/09/2021 548/555 750/761 635/645
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

 

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Naira

Dollar to Naira Exchange Rate Today, Tuesday, September 14, 2021

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Naira Notes - Investors King

Naira extended its decline on Tuesday as it hits N557 against the United States Dollar at the parallel market, popularly called the black market.

The local currency exchanged at N557 to a United States Dollar at the black market, representing an all-time record low against the greenback. Against the British Pound and the Euro common currency, the Naira slid to N760 and N645, respectively.

Africa’s largest economy is enmeshed in low forex liquidity caused by poor economic structure that over the years has limited and weakened the nation’s foreign revenue generation. This weak foreign revenue generation has impeded Nigeria, a largely import dependent economy, from effectively servicing her economy with necessary forex for economic activities.

The inability to service the economy with enough forex coupled with the decision of the Central Bank of Nigeria to halt the sale of forex to Buruea De Change Operators have compounded Nigeria’s forex situation and further disrupted the Naira’s outlook.

Still, the apex bank continues to post its inaccessible official rates as shown in the table below. Despite insisting that exchange rates are stipulated Central Bank of Nigeria’s rates, many Nigerians and businesses operating in the country find it hard or impossible to access forex at the central bank’s rates.

The Central Bank of Nigeria sells U.S Dollar at N410.51, while the British Pound and Euro are sold at N568.1869 and N483.6629, respectively.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

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Forex

Remittance to Africa Projected to Decrease in 2021

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Money Transfer - Investors King

Remittances to African countries are expected to decrease by 5.4 percent from $44 billion in 2020 to a projected total of $41 billion in 2021, due to the effects of Covid 19 pandemic, according to findings of Continental Migration Report 2021.

The report titled, “African regional review of implementation of the Global Compact for Safe, Orderly and Regular Migration,” was produced by the Economic Commission for Africa (ECA) in partnership with the African Union Commission (AUC). It builds from four sub-regional reports compiled by AUC and a summary from stakeholder consultations at the just concluded 2021 African regional review meeting on the Global Compact for migration (August 26 to September 1, Morocco ).

Although the COVID-19 pandemic was expected to lead to a decrease in remittances to Africa in 2020, findings of the reports show that by October 2020 remittances to Africa had reached approximately $78.4 billion, constituting 11.7 per cent of global remittances. Remittances have therefore demonstrated greater resilience and reliability as a source of capital in Africa than foreign direct investment flows.

It recommends that governments across the world should take effective action to facilitate and boost remittances in view of supporting the fight against COVID-19 and ultimately building a more sustainable post-pandemic world

According to the report, the costs associated with sending remittances to Africa are some of the highest in the world. Until very recently, average transaction costs were equivalent to 8.9 per cent of the amount being sent for a remittance payment of $200,

With respect to the cost of sending money, the report says Africa is still far from achieving the 3 percent target set out in Sustainable Development Goal 10.

The Addis Ababa Action Agenda of the Third International Conference on Financing for Development and Sustainable Development Goal indicator 10(c) provides that countries should, by 2030, reduce to less than 3 percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 percent.

Remittances are estimated to constitute approximately 65 per cent of the income of some receiving countries and senders spend an estimated 15 percent of their income on remittances.

For 25 African countries, all of which have large diaspora populations, remittances are the primary source of national income.

In response, a number of African countries have taken action to lower the costs of remittance transfers. Some countries also offer diaspora bonds to investors and have relaxed foreign exchange controls to allow for electronic and mobile money transfers at reduced costs.

“It should be noted, in that regard, that the use of digital money transfer platforms reduces transfer fees in Africa by an average of 7 per cent,” says the report.

“Private financial institutions also offer incentives to encourage members of diaspora communities to use their services, including low transaction fees for remittances, and facilitate diaspora-initiated projects, especially in the real estate sector. These measures all promote the financial inclusion of migrants and their families.”

The report recommends that member States should support migrants and their families through the adoption of laws and regulations to facilitate the sending and receiving of remittances, including by fostering competition among banks and other remittance handling agencies with a view to establishing low-cost transfer mechanisms.

African countries should also make every effort to reduce the transfer costs associated with remittance payments, inter alia, by making more extensive use of digital transfer solutions, such as MPESA, and by streamlining the regulatory constraints associated with international money transfers. African States should also engage with destination countries to identify ways to enhance the provision of basic services to migrants in those countries.

To achieve Global Compact objectives 1, 3, 7, 17 and 23, member States should implement steps proposed in the context of regional economic community-led dialogues on migration; and consider the increasingly important role played by diaspora communities in fostering development, including through remittance payments, skills development initiatives and the adoption of emerging technologies.

ECA projects that remittance inflows to Africa could decline by 21 percent in 2020, implying $18 billion less will go to the people who rely on that money. It is therefore critical to preserve this essential lifeline. As the world enters an economic downturn, remittance flows will be more important than ever for the poorest and most vulnerable people, espcially those without access to economic and social safety nets.

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