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New Zealand Dollar Jumped The Most Since November

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New Zealand Prime Minister, John Key

December is turning into a cruel month for traders counting on cuts in interest rates to drive down currencies.

New Zealand’s dollar jumped the most since November after central bank chief Graeme Wheeler delivered the policy easing that economists had predicted without the promise of further reductions. That came less just a week after his European counterpart, Mario Draghi, sparked the euro’s biggest rally since 2009 by unveiling a smaller-than-anticipated stimulus package.

The elephant in the room is the Federal Reserve. Its looming policy decision is making it trickier for speculators to predict the actions of other central banks and to work out where exchange rates are headed. As with the euro, strategists are now reassessing forecasts for the kiwi, becoming less certain how far it can extend this year’s 13 percent drop, which is already the steepest since 2008.

“Investors are clearly finding it harder to read central banks,” said Mansoor Mohi-uddin, senior markets strategist at Royal Bank of Scotland Group Plc in Singapore. “Central banks are all hoping the Fed’s imminent tightening will weaken their domestic currencies against the greenback, so they’re holding back on meeting the market’s expectations for further easing.”

The Parker Global Currency Manager Index of top funds has lost 0.7 percent this month to extend its slide in 2015 to 2.7 percent. That puts it on course for its worst annual decline since 2011.

Falling Short

For New Zealand dollar bears, Reserve Bank Governor Wheeler didn’t go far enough when he cut the official cash rate by a quarter-percentage point to 2.5 percent, completing the reversal of the four increases in 2014. They were left disappointed by his comments in Wellington on Thursday that the fourth cut this year should be enough to ensure inflation accelerates toward the central bank’s target. Lower interest rates tend to reduce demand for currencies.

Instead, traders will have to depend on the prospect of further U.S. rate increases, as well as the falling Chinese yuan and slumping commodity prices, to push the kiwi lower, RBS’s Mohi-uddin said.

The local dollar was at 67.53 U.S. cents as of 8:53 a.m. in London on Friday, having rallied from a six-year low of 61.30 on Aug. 24 and as low as 65.82 just after the RBNZ’s policy announcement. It gained as much as 1.7 percent by the New York close on Wednesday, the trading session that included the policy decision, the steepest intraday climb since Nov. 19.

‘Relatively Robust’

“We still like the U.S. dollar higher heading into the Fed, and the current concerns about commodity prices and China support the case for New Zealand dollar weakness,” said Raiko Shareef, a markets strategist at Bank of New Zealand Ltd. in Wellington. “But there will be some offset by a relatively robust New Zealand economy and an on-hold RBNZ, which means that weakness may be more modest than we’d thought earlier.”

Currency bears were also caught out as the euro surged 3.1 percent on Dec. 3 after the European Central Bank’s quantitative-easing overhaul and deposit-rate cut fell short of what some investors had predicted. Draghi repeatedly hinted about more easing in the run-up to the gathering, prompting hedge funds and speculators to push bets on a weaker euro close to a record.

After two cuts this year, the Bank of Korea left its benchmark rate unchanged Thursday, saying it would wait to see how the Fed’s decision impacted its economy.

That may focus attention on whether other central banks will be influenced by the prospect of an imminent U.S. rate increase. Officials in Sweden, Hungary and the Czech Republic are all due to meet before the Fed decision next week. Norway’s central bank will decide on policy after its U.S. counterpart.

Reassessing Forecasts

The full implications of this month’s decision in Wellington have yet to be digested. In the wake of the RBNZ meeting, Macquarie Bank Ltd. and Bank of New Zealand are both looking again at their forecasts for the kiwi to weaken to 61 U.S. cents in the first half of 2016. The median estimate in a Bloomberg economist survey is for a drop to 62 cents.

New Zealand’s dollar tumbled 18 percent against its U.S. counterpart in the first three quarters of this year, and since the end of September has rebounded almost 6 percent, outpacing all of its major peers. The resurgence has been helped by prices for dairy, the country’s biggest export, stabilizing after reaching a 12-year low in August.

Wheeler has now unwound all of the 1 percentage point of rate increases he carried out last year, taking borrowing costs back to the record low of 2.5 percent that he inherited when the New Zealand native took up his post in 2012 after spending more than a decade in Washington as a World Bank official.

Preserving Ammunition

“Strictly speaking, the explicit easing bias remains, but it is conditional and the RBNZ made it clear they think they have done enough,” said Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank in Singapore. “Apart from the usual sensitivity to dairy auctions, global influences will have a greater say.”

He has been relying on lower rates to make the nation’s exports more competitive, though he’s reluctant to ease further as Auckland’s property boom spreads and the economy shows signs of gaining momentum.

“It does seem that the central banks hope that the Fed will help them keep their currencies from rallying,” said Valentin Marinov, head of Group-of-10 currency research at Credit Agricole SA’s corporate and investment-banking unit in London. “They feel they need to preserve some of their ammunition for the future battles of the global currency war.

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.

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Naira

Dollar to Naira Today January 24, 2022

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Naira Exchange Rates - Investors King

Here is the daily dollar to Naira exchange rates at both the official and black markets today, January 24, 2022.

Read and follow Investors King daily update on the official exchange rate for the dollar as well as Black Market rates, Bureau de Change (BDC) rates and CBN rates.

How Much is Dollar to Naira Exchange Rate Today, January 24, 2022, at the Official Market?

The official exchange rate for $1 dollar to naira = ₦415.64/$1, according to the Central Bank of Nigeria official exchange rates.

However, FMDQ Group forex data puts the dollar to naira exchange rate at ₦416 to $1 on Friday, 21st January 2022. The Investors and Exporters forex platform is yet to be updated today.

How Much is Black Market Exchange Rate for Dollar to Naira Today?

The dollar to naira exchange rate at the unregulated forex market popularly known as the black market is N560 for buyers and sells at N565 today, Monday, January 24, 2022, according to sources cited by Bureau De Change (BDC).

The Central Bank of Nigeria has warned against patronising the black market and directed all Nigerians to visit their banks for their forex needs.

How Much is Bitcoin to Naira Today?

Bitcoin to Naira exchange rate dipped by 0.25 percent in the last 24 hours to N14.630 million while Ethereum [ETH] to Naira stood at N979,245, representing a decline of 3.40 percent.

The entire cryptocurrency plunged in December 2021 after the US Federal Reserve announced plans to adjust its monetary policy to accommodate the change in the nation’s economic realities. Experts are predicting that an increase in interest rate will impact the crypto space as capital inflow is projected to drop.

Meanwhile, the minister of finance Mrs Zainab Ahmed on Monday said the federal government has suspended plans to remove fuel subsidy in 2022 given the nation’s inflation rate.

Speaking at National Assembly, she said  “We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry,” Ahmed said at the meeting.

“Mr. President does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures.

“One of these include the roll-out of the refining capacities of the existing refineries and the new ones which would reduce the amount of products that would be imported into the country.”

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Naira

Naira Slides Marginally Against US Dollar, Exchanges at N415

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Naira Exchange Rates - Investors King

The Nigerian Naira fell slightly against the United States Dollar on Monday, according to the last update from the Central Bank of Nigeria.

The local currency was exchanged at N414.89 per dollar on Friday before depreciating by N0.11 or 0.03 percent to N415 on Monday.

It should be recalled that the Naira plunged to N435 against the United States on Friday 31, December 2021 when the Central Bank of Nigeria (CBN) adjusted its exchange rate by N2 to accommodate the change in Nigeria’s economic realities.

The Naira has now improved by about 4.6 percent against the United States Dollar from the year to date. The improvement was after the market digested and interpreted the CBN action as the usual forex devaluation in line with the apex bank policy.

At the unregulated black market, traders in Abuja sold the greenback at N570 a unit and buy it at N569. CBN had attributed Nigeria’s forex challenges to the activities of black market operators and warned Nigerians to stop patronising that section of forex.

Meanwhile, the crypto space remained bearish across the board ahead of US Federal Reserve rate decisions. Bitcoin to Naira exchange rate declined by 2.5 percent to N17.346 million in the last 24 hours while Eth shed 3.6 percent.

Other cryptocurrencies suffer the same fate as Binance coin, Tether, Cardano and XRP depreciated by 3.70 percent, 0.31 percent, 1.72 percent and 2.93 percent.

Bitcoin looks vulnerable above the $41,000 support level, largely due to the drop in capital inflow into the crypto space ahead of a possible interest rate increase in the world’s largest economy, the United States.

Bitcoin continues to look vulnerable having failed to bounce back strongly off the recent lows. It appeared to be gathering some upside momentum at times last week but it quickly ran into resistance just shy of $45,000 where it had previously seen support. All eyes are now on $40,000 and whether we’re going to see another run at that major support level,” said Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA, in an email to Investors King.

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Naira

Naira Gains 1.58 Percent to N416 at Official FX Market, Bitcoin, Other Cryptocurrencies Plunge

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira gained 1.58 percent or N7.56 against the United States Dollar at the official forex market on Wednesday.

The local currency opened the day at N423.56 to a US Dollar before improving in value to N416 against the greenback. At the official forex window managed by the FMDQ Group, investors traded $114.95 million on Wednesday.

The improvement in Naira value was after the market had digested the Central Bank of Nigeria’s currency adjustment. The central bank had adjusted the Naira to Dollar exchange rate by N2 from N411 to N413 on Friday, leading to devaluation outcry across Africa’s largest economy.

On Friday, the Naira plunged to as low as N435 against the United States Dollar at the official forex trading market and N575 at the unregulated parallel market, popularly known as the black market, before moderating to N416.

Meanwhile, bitcoin and other cryptocurrencies plunged across the board. Bitcoin depreciated by 7.16 percent to $43,058 per coin in the last 24 hours. The decline does not stop there as the second most capitalised digital asset, Eth dipped by 9.77 percent to $3,441.

Solana, Ripple (XRP), Luna and Cardano (ADA) lost 11.48 percent, 8.13 percent, 9.5 percent and 8.6 percent, respectively.

The decline was after the US Federal Reserve minutes of December 14 – 15 meeting released on Wednesday revealed that policymakers are planning to raise interest rates as early as March 2022 to curb escalating inflation rate. Generally, hawkish monetary policy is negative for cryptocurrency as it drags on capital inflow into the space and encourages investors to look into more stable assets for higher interest rates.

According to The Wall Street Journal, the “Federal Reserve officials at their meeting last month eyed a faster timetable for raising interest rates this year, potentially as soon as in March, amid greater discomfort with high inflation.

“Minutes of their Dec. 14-15 meeting, released Wednesday, showed officials believed that rising inflation and a very tight labor market could call for lifting short-term rates “sooner or at a faster pace than participants had earlier anticipated.”

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