Connect with us

Forex

Forex Weekly Outlook May 23 – 27

Published

on

Images Of Chinese Yuan Banknotes

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.

EURUSD

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.

EURUSDWeekly

Click to enlarge

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.

GBPUSD

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.

GBPUSDDaily

Click to enlarge

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.

AUDUSD

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.

AUDUSDWeekly

Click to enlarge

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.

NZDUSDDaily

Click to enlarge

USDCAD

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.

USDCADDaily

Click to enlarge

GBPJPY

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.

GBPJPYDaily

Click to enlarge

A wonderful week to us all, and please drop comments.

 

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Naira

Black Market Dollar to Naira Exchange Rate Today 9th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 9th, 2024 stood at 1 USD to ₦1,450.

Published

on

Naira Exchange Rates - Investors King

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 9th, 2024 stood at 1 USD to ₦1,450.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,440 and sold it at ₦1,430 on Wednesday, May 8th, 2024.

This indicates a decline in the Naira exchange rate compared to the current rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ₦1,450
  • Selling Rate: ₦1,440

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Continue Reading

Black Market Rate

EFCC Raids Wuse Zone 4 Market, Clashes with Bureau De Change Operators

Published

on

EFCC

Tensions escalated in the bustling Wuse Zone 4 Market as operatives from the Economic and Financial Crimes Commission (EFCC) conducted a raid targeting Bureau De Change (BDC) operators on Tuesday.

The raid, intended to curb illegal currency trading and enforce regulatory compliance, quickly turned confrontational, resulting in clashes between the EFCC agents and currency traders.

Eyewitnesses reported scenes of chaos as the operatives attempted to apprehend BDC operators, who resisted the arrests vehemently.

The situation escalated to the point where gunshots were fired, and vehicles belonging to the EFCC were damaged.

Two currency traders, speaking anonymously, confirmed the events, citing frustration and desperation among the traders as the underlying cause of the resistance.

According to one witness, who requested anonymity for fear of reprisal, the traders’ reaction was fueled by their perception that the EFCC’s arrests were becoming excessively frequent and motivated primarily by a desire to extort money from them.

“Yesterday (Monday), they arrested traders, but they faced resistance today. People are getting tired and desperate,” the witness explained.

Another trader echoed similar sentiments, warning that continued raids by the anti-corruption agency could escalate into violence and potentially lead to fatalities. “If this thing continues like this, that means they would kill people,” the trader cautioned.

The growing frustration among traders stems from their belief that the EFCC’s actions, which often culminate in monetary fines, serve more as revenue-generating measures than effective regulatory enforcement.

The EFCC’s resurgence in raiding activities is part of its broader efforts to stabilize the Nigerian naira and combat illegal currency speculation.

In recent weeks, the commission has intensified its crackdown on suspected currency speculators and fraudulent foreign exchange practices.

However, despite these efforts, the naira has continued to depreciate, reflecting the challenges facing Nigeria’s foreign exchange market.

Traders at the Wuse Zone 4 Market highlighted the market’s volatility, with fluctuations in exchange rates making it increasingly difficult to predict trading outcomes. One trader, identified as Malam Yahu, expressed concern over the market’s instability and the challenges it poses for traders.

“Right now, the market is just fluctuating, and the naira is not stable at all,” he lamented. Yahu highlighted the impact of the EFCC raids on trading activities, noting how traders refrained from transactions to avoid potential losses.

At the official market, data from the FMDQ exchange securities revealed a sharp depreciation of the naira, raising concerns about rapid fluctuations and market volatility.

The intraday high and low of the naira against the dollar further underscored the challenges facing Nigeria’s foreign exchange market.

As the EFCC continues its crackdown on illicit currency trading, the clashes in the Wuse Zone 4 Market serve as a stark reminder of the underlying tensions and frustrations prevalent among currency traders.

The agency faces the daunting task of balancing enforcement actions with addressing the root causes of illegal trading, amidst ongoing challenges in Nigeria’s foreign exchange market.

Continue Reading

Forex

Nigerian Companies Settle Dollar Debts as Central Bank Reforms Bolster Forex Liquidity

Published

on

Forex Weekly Outlook March 6 - 10

In a significant development for Nigeria’s corporate landscape, several major companies have begun to settle their long-standing dollar debts following the Central Bank of Nigeria’s (CBN) recent reforms that bolstered dollar supply.

The reforms have provided much-needed relief to businesses grappling with forex scarcity and overdue obligations.

Among the notable firms taking advantage of the improved forex liquidity are MTN Nigeria Communications Plc, BUA Foods Plc, and Cadbury Schweppes Overseas Ltd.’s Nigeria unit.

These companies, some of the largest players in Africa’s most populous nation, have reported that they are now able to access dollars to meet their foreign currency obligations, marking a stark reversal from previous struggles with forex shortages.

MTN Nigeria, the country’s leading mobile operator, disclosed that it utilized the enhanced liquidity in the forex market to significantly reduce its letters of credit obligations by 41.6%, slashing it down to $243.4 million from $416.6 million in December.

Chief Financial Officer Modupe Kadiri emphasized this move as a strategic measure to mitigate losses during an investor conference call last week.

The Central Bank of Nigeria’s reform measures, implemented since the beginning of the year, have been instrumental in driving this positive change. These measures include raising the benchmark interest rate by 600 basis points to attract capital inflows and abandoning the currency’s peg, allowing the market to determine the exchange rate of the naira.

After years of unconventional currency management that deterred investors and exacerbated forex scarcity, these reforms have injected new life into Nigeria’s forex market.

According to Tatonga Rusike, a sub-Saharan Africa economist at Bank of America Corp., portfolio flows have responded positively to the reforms, leading to a substantial increase in average daily forex turnover, which has more than doubled from 2023 lows.

Recent data from Chapel Hill Denham indicates a remarkable surge in dollar liquidity, with a 90% jump to $160.8 million on Tuesday compared to the previous day.

Also, the central bank’s proactive approach, including selling dollars to money traders to enhance distribution to retail users, has further contributed to the improved forex liquidity environment.

The positive impact of increased dollar liquidity is evident across various sectors of the Nigerian economy.

BUA Foods, the country’s largest food and beverage company, reported a 6% reduction in debts during the first quarter of this year, attributed to improved dollar availability.

Similarly, Cadbury Nigeria has been able to fulfill all its dollar requirements from the official market since the beginning of the year, leading to a drop in local-currency cash reserves.

Economists and industry experts view the enhanced forex liquidity as a welcome development that provides companies with a much-needed reprieve to settle debts and navigate the effects of currency devaluation.

Adetilewa Adebajo, economist and chief executive at Lagos-based CFG Advisory, emphasized the importance of sustaining liquidity to support the turnaround desired by companies.

He stressed the need for positive real rates, matching interest rates with inflation, and fiscal responsibility to ensure continued economic stability and growth.

As Nigerian companies take advantage of improved forex liquidity to address long-standing financial challenges, the success of the central bank’s reforms will be closely monitored, with hopes for sustained liquidity and economic recovery in the months ahead.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending