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Dollar Set for Best Week Since November After Post-Fed Tumble

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The dollar headed for its best week since November, climbing from a nine-month low reached last week, as Federal Reserve policy makers hinted interest rates may rise in the next few months.

The U.S. currency rose against most of its major peers after Fed Bank of St. Louis President James Bullard said officials may be getting close to lifting rates again, provided growth continues as forecast. Government releases on Thursday showed fewer jobless claims than forecast in the week through March 19 and durable goods orders fell less than projected last month. The yen fell for a sixth day against the dollar after a government report showed Japanese investors bought a record sum of overseas bonds and stocks last week.

Investors are slowly shifting back into the greenback after a cautious tone from Fed policy makers at their March 15-16 meeting sent the dollar tumbling. Traders are refocusing on the U.S. economy to evaluate whether incoming data can sustain a rebound in the currency. Employers probably continued to bolster the headcount this month, a report April 1 is forecast to show.

‘More Room’

“The dollar, from a broad perspective, I think there’s probably still some more room to strengthen, if the U.S. data’s good,” said Eric Stein, the Boston-based co-director of global fixed income at Eaton Vance Corp., which oversees around $302 billion. “Again, we get a dovish Fed statement that seems to lead to hawkish commentary afterwards.”

The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, is set for a 1.3 percent gain this week, the biggest since the period ending Nov. 6 and added 0.2 percent to 1,201.76 at 11:32 a.m. in Tokyo on Friday. The dollar climbed 0.1 percent to 113.05 yen and rose 0.1 percent to $1.1163 per euro.

Markets in parts of Asia, including Hong Kong and Singapore, Europe and the U.S. are closed Friday for national holidays.

The yen headed for its biggest weekly decline against the greenback since the period ended Jan. 29., the day when the Bank of Japan announced decision to employ a negative interest-rate policy.

Chasing Yields

Japanese investors’ purchases of overseas equity and investment-fund shares as well as bonds totaled 2.59 trillion yen ($22.9 billion) in the week ended March 18, largest amount in Ministry of Finance data going back to 2005.

The increased overseas investment is leading to weakness in the yen, said Kenji Yoshii, Tokyo-based currency strategist at Mizuho Securities Co. “Domestic yields remain in negative zones so investors have no choice but to seek yields abroad. This trend will likely continue.”

Jun Kato, a senior fund manager in Tokyo at Shinkin Asset Management, said the dollar’s advance accelerated after technical resistance of 112.90 yen was broken, with markets eyeing 113.50 as the next target.

“The higher dollar trend is becoming more evident against the yen,” Kato said. “But the move broadly remains within an adjustment from the post-Fed bearishness.”

Gauging U.S. Data

U.S. data have steadily improved over the last few weeks, with Bloomberg’s gauge of economic surprises advancing to the highest in more than a year.

“The next rate increase may not be far off provided that the economy evolves as expected,” Bullard said in New York on Thursday. Futures contracts show traders see a 6 percent likelihood of a rate increase at policy makers’ meeting next month, and a 38 percent probability in June.

The Bloomberg Dollar Spot Index has fallen 2.5 percent this year, after a 9 percent gain in 2015 and an 11 percent rally the year before.

“The data should continue to strengthen, it should continue to surprise a little bit and that should be sufficient for them to go in June,” Binky Chadha, chief global strategist at Deutsche Bank AG, said in an interview on Bloomberg Television. The upside for the greenback may be limited as “the dollar itself has also priced in a lot.”

Bloomberg

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Energy

Nigeria Partners with ECOWAS and Morocco to Launch $26B African Gas Pipeline

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Gas-Pipeline

The Nigerian government, in partnership with the Economic Community of West African States (ECOWAS), Morocco, and Mauritania, has announced plans to advance the $26 billion African Atlantic Gas Pipeline project to drive economic growth across Africa.

This development was revealed on Monday, November 5, by Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), at the ECOWAS Inter-Ministerial Meeting on the Nigeria-Morocco Gas Pipeline Project.

Speaking at the meeting, which was attended by ECOWAS Ministers of Hydrocarbons and Energy as well as representatives from Morocco and Mauritania, Kyari stated that, once completed, the project will connect 13 African countries.

Represented by Olalekan Ogunleye, NNPC’s Executive Vice President for Gas Power & New Energy, Kyari said this will be Africa’s largest pipeline project.

Ogunleye confirmed that progress has been made with the front-end engineering design completed, the phase two study finalized, and work ongoing for environmental and social impact assessments as well as land acquisition and resettlement.

He emphasized NNPC’s readiness to execute the project: “Today, we come together to make significant progress in the African Atlantic gas pipeline project, which is a transformative initiative connecting at least 13 African nations in shared prosperity and development. These achievements underscore our capability to deliver this landmark project, supported by strong regional collaboration.”

Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), described the project as a game-changer for the regional economy, stating, “We stand at a critical juncture where these agreements can reshape our energy landscape, strengthen our economies, and uplift our people.”

He also highlighted that the project will increase Africa’s presence in the global gas market, noting that “the agreements demonstrate a strong commitment to advancing hydrocarbon and energy trade across ECOWAS, enhancing access to natural gas in West Africa, and expanding Africa’s global footprint in the gas market.”

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Crude Oil

Nigerian Army Seizes 700,000 Liters of Stolen Petroleum in Sweeping Raid Across Four States

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In a series of raids across Rivers, Bayelsa, Akwa Ibom, and Delta states, troops from the 6th Division of the Nigerian Army seized 700,000 liters of stolen petroleum products, sealed 29 illegal refining sites, and arrested 24 suspected oil thieves.

In a statement issued by the Division’s Public Relations Officer, Lt. Col. Danjuma Jonah, it was noted that 14 boats involved in crude oil theft were also destroyed during the operation.

Jonah disclosed that the raids were conducted between October 28 and November 3, 2024.

He revealed that the troops intercepted a large wooden boat carrying over 150,000 liters of stolen crude oil in the Kula area of Akuku-Toru Local Government Area of Rivers State.

Providing a breakdown of the operation, Jonah stated, “Another boat carrying 50,000 liters of crude oil was seized, while three illegal refining sites were dismantled, and cooking pots containing 20,000 liters of stolen diesel were confiscated. Troops also dismantled ten illegal refining sites in Kay and Abesa in Akuku-Toru LGA, seizing 400,000 liters of illegally refined diesel.”

In Bayelsa State, soldiers deactivated two illegal refining sites at Boma Creek in Southern Ijaw LGA, recovering storage tanks holding over 2,500 liters of stolen crude. Similarly, operations in Obughene Creek in Southern Ijaw yielded over 4,500 liters of stolen crude, while another 3,000 liters of illicit product were seized at West Boma Creek.

In Akwa Ibom State, troops intercepted two Toyota Camrys loaded with illegally refined diesel, concealed in nylon bags, totaling 3,000 liters. The vehicles were stopped along the Ikot Abasi-Abak road, and the drivers were detained.

In Delta State, multiple raids were conducted, including the interception of a tricycle in Kwale, Ndokwa West LGA, carrying stolen iron pipes allegedly taken from decommissioned Oando pipelines.

Another raid in Patani town uncovered a storage dump containing 40 jerricans of stolen products, while troops patrolling Uro Community waterways intercepted a wooden boat with 200 sacks of premium motor spirit,” he concluded.

The statement added that suspects arrested during the raids have been handed over to relevant authorities for prosecution.

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Crude Oil

OPEC+ Supply, Trump-Harris Election Face Off Lend Support to Oil Prices

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The decision of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay plans to increase output for another month and the close call of the presidential elections in the United States triggered a 2 percent rise in oil prices.

Brent futures were up $1.98, or 2.7 percent at $75.08 a barrel while the US West Texas Intermediate (WTI) crude rose $1.98, or 2.85 percent to $71.47.

OPEC+ said it would extend its output cut of 2.2 million barrels per day for another month in December at a meeting on Sunday.

Saudi Arabia and Russia, as well as Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates (UAE) agreed to extend the November 2023 voluntary production adjustments of 2.2 million barrels per day for one month until the end of December 2024.

The move is aimed at boosting oil prices amid uncertain demand and accelerating supply, with an eye on the imminent US presidential election, though analysts predict a limited impact.

Also speaking on Monday, OPEC’s Secretary General, Mr Haitham Al Ghais said on Monday that OPEC remains very positive on demand for oil in both the short and long term.

The market has also shifted focus to the American presidential election between Democratic presidential nominee and current Vice President, Kamala Harris and Republican Donald Trump on Tuesday (November 5).

So far, the outcome has shown that the election is tight as it could take days after voting ends to know the eventual winner.

The market will also be looking at the developments in the Middle East, especially with anticipation that Iran was preparing to attack Israel from Iraq within days.

Markets were also watching a new tropical storm that was forecast to form on Monday in the Caribbean and threaten offshore oil production along the Gulf of Mexico.

Oil companies like Shell have moved its non-essential personnel from six platforms, adding it currently expects no other impacts on its production across the Gulf of Mexico.

There will be anticipation of what the US Federal Reserve will do at the next meeting on Thursday with expectations high that the US central bank will cut interest rates by 25 basis points.

Also, investors will be looking to China where the government is expected to approve additional stimulus to boost the slowing economy in the world’s largest oil importer.

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