The various economic data released last week from the U.S. shows an improved economy, especially the consumer price index that rose 0.4 percent in April and 1.6 percent year-on-year. While this is a good news, it is yet uncertain if it’s enough for Fed to increase borrowing cost when job creation is still struggling and gasoline cost rising with oil prices. But with the U.S. dollar renew demands, I have narrowed down pairs I will be looking at this week to EURUSD, GBPUSD and AUDUSD.
Currently, the euro-area is struggling with the possibility of Britain exit from the European Union. This couple with weak manufacturing sector amid global slowdown has created too many uncertainties around the single currency, and as the June referendum draws closer demand is expected to drop as most investors will like to know the out-come of the June vote before making a long-term commitment.
Now to the chart, three weeks ago, eurusd weekly candlestick closed as rejection after reaching 1.1615, and failed again two weeks ago to sustain 1.1338 support level established since January 18th, hence, reaching 1.1178 price level. Its lowest price level in seven weeks. As long as new resistance level 1.1338 holds, I am bearish on EurUSd with 1.0925 as target.
The pound jumped the most this year last week after polls showed brexit risks receding, but quickly lost half of its 331 pips gain immediately the officials of the Bank of England said even with positive outcome in June referendum. U.K. will still require additional stimulus to aid its economy.
Another reason why I think this is a good set up is the chart. The last candlestick of last week, Friday’s candlestick closed bearish, giving us evening star pattern after Thursday’s spinning top rejection. Though its a volatile pair that requires certain monitoring, but trading it against a strong US dollar should give us around 150 pips from 1.4500 with 1.4350 as the target, provided price remains below 1.4500 price level.
The Aussie dollar is worth looking into this week for several reasons, one its economic data failed to support its gains so far this year after inflation fell below the Reserve Bank of Australia target in the first quarter of the year, prompting Governor Glenn Stevens and its monetary committee to cut interest rates by 25 basis points. While the market thinks another 25 basis points cut will be needed to achieve the central bank target. The central bank has stepped forward to maintain its current outlook by leaving interest rates unchanged. A decision that creates more doubt about the state of the economy, and with Goldman Sachs Group Inc. kick-starting a process to sell $9 billion of its Australian asset arm. We can only expect more downfall of the currency in the days to come.
The weekly time-frame confirmed rejection of higher prices with last week close, as long as price remain below 0.7379 I am bearish on Audusd but to minimize risk and maximize profit, it is advisable to wait for Reserve Bank of Australia Governor Glenn Stevens Speech due on Tuesday for a better entry while targeting 0.7092.
Last Week Recap
NUDUSD dropped 138 pips last week from the 0.6847 entry level, but has gained back 73 pips since last week Thursday even with negative Global Dairy Trade and Producer Price report, this week New Zealand trade balance report and annual Budget release are due. Hence, I will be looking to sell at a much better price level for 0.6771 that seems to be our new support, and then 0.6609 as explained last week. Provided 0.6847 resistance level still holds.
Last week target was hit at 1.3142, but this week a sustainable close above 1.3142 resistance level is needed to confirm the continuation of trend for another 240 pips with 1.3382 as the target.
Fell short of 161.71 target by 9 pips after gaining 597 pips. This is week, I will stay aside while monitoring price actions and fundamental behind the pair as BOJ comments and England numerous issues from brexit to economic data could trigger volatility.
A wonderful week to us all, and please drop comments.
Naira Gained Slightly at I&E Forex Window to N412.81/$US
Despite the Nigerian Naira trading at a record-low across the nation’s unregulated black market, the embattled currency opened slightly higher at N412.81 to a United States Dollar on Monday at the Investors and Exporters Forex Window, representing an increase of 0.08 percent when compared to the N412.88 it closed on Friday.
The improvement in Naira value was after the Central Bank of Nigeria (CBN) directed all depoisit money banks operating in the country to freeze bank accounts linked to Oniwinde Olusegun Adedotun, the founder of www.abokfx.com, a forex rate publishing platform.
Godwin Emefiele, the Governor, CBN had blamed black market and bureau de change operators for the constant plunge in Naira value against its global counterparts and insisted that forex rates remained the apex bank stipulated rates and not the unregulated rates imposed by speculators and hoarders and published to the public by Abokifx and other business platforms.
“There was a particular time I asked our colleagues to call the so-called owner of abokiFX, that we want to understand his model and how he came about advertising those rate, we find him as someone, a Nigerian who lives in England and conducts this nefarious activity on our economy.
“It is economic sabotage and we will pursue him, wherever he is, we will report him to international security agencies, we will track him, Mr Oniwinde, we will find you, because we cannot allow you to continue to conduct an illegal activity that kills our economy.” Emefiele said.
The governor further stated that the website was set up primarily manipulate and speculate forex rates. He said “they get naira loans, use to purchase dollars, take a position, change the rate over a given period, sell the dollars they purchased and make a profit, this is completely illegal, unacceptable and we will pursue them.”
On Friday, the last time Abokifx published unregulated forex rates, Naira was qouted at N570 to a United States Dollar while the British Pound and the Euro were quoted at N770 and N655, respectively.
U.S Dollar Jumps to Three Weeks High on Better Than Expected Retail Sales
The United States Dollar rose to a three-week high after data from the Commerce Department showed that the U.S retail sales rebounded in the month of August despite falling consumer confidence.
The US Dollar Index rose to 93.40 on Monday to extend Friday breakout above the 93.00 key resistance level.
U.S retail sales jumped to its highest in five months in the month of August to beat 0.8 percent decline predicted by experts. Retail sales grew by 0.7 percent in August to increase the odds of the US Federal Reserve announcing tapering during next week’s Federal Open Market Committee (FOMC) meeting.
“U.S. consumption is not slowing as quickly as it appeared a month ago despite the fading stimulus, and the Delta variant did not much affect the industries feeding into retail sales,” said Chris Low, chief economist at FHN Financial in New York. “The economy continued to hum in August.”
Against the Japanese Yen, the U.S dollar strengthened to 109.48 from 109.91 attained on Friday on broad-based selloff during London trading session, while heavy selloff plunged British pound against the U.S dollar 1.36610 before reboundling slightly to 1.36946.
The Euro dropped from 1.17883 recorded on Friday to 1.16995 on Monday during London trading session.
Naira Exchange Rates Today, Friday, September 17, 2021
Naira continued its downward trend against other currencies on Friday as it plunged to N570 against the United States Dollar at the black market. The local currency traded at N770 and N655 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 N565, N775 and N655 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
Bureau De Change Naira Rates
Central Bank of Nigeria’s Official Naira Rates
|9/16/2021||SOUTH AFRICAN RAND||28.3101||28.3446||28.3792|
N.B: These tables are updated three times a day.
Tanzania: African Development Fund Approves $116 Million Loan to Upgrade Southern Road Corridor
Afrexim and Asoko Partner to Help List African Companies
HOPE Consortium and Astral Aviation Sign MOU to Enhance Vaccine Distribution Solutions in Africa
Naira3 weeks ago
Naira Plunges Further, Exchanges at N530 to U.S Dollar
News1 week ago
Taliban Says Men and Women to Study Separately in Gender-Segregated Universities
News1 week ago
Terrorism Sponsors: UAE Names Six Nigerians, 47 Others
News3 weeks ago
Buhari Terminates Appointment of Power and Agriculture Ministers
Economy4 weeks ago
Nigeria Economy Grows 5% In Second Quarter, Its Third Consecutive Growth
Economy1 week ago
Senate Receives Buhari’s Request For $4.054B, €710M, $125M External Borrowing Approval
Banking Sector4 weeks ago
Zenith Bank Launches Intelligent Chatbot, ZiVA
Energy4 weeks ago
NNPC Made A Net Profit of N287B in 2020 – Buhari