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Forex Weekly Outlook June 13 – 17

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Forex Weekly Outlook June 13 – 17

 

The dollar rallied again last week after crude oil prices plunged and commodity backed currencies followed suit, but the uncertainties surrounding global market ahead of Federal Reserve meeting this week and Britain’s referendum later in the month continues.

Last week, Fed Chair Janet Yellen said interest rate hikes are coming but gave no clue as to when, while explaining that the economy has registered considerable growth towards Fed’s goals of maximum employment and price stability, she said a shift in the economic outlook will necessitate a corresponding shift in Fed’s policy. Also the US unemployment claims improved from 268,000 to 264,000 following a six-year low nonfarm payrolls report in May. Given the current market condition, I will be trading EURUSD, AUDJPY and last week pairs.

EURUSD

The 19-nation currency, Euro is enmeshed in brexit and as such vulnerable, even with 0.6 percent revised economic growth in the first quarter. The currency remains unattractive as investors continued to seek less volatile currency with predictable direction. On the other hand, the US dollar is moderately stable with rate hike off the table, and I believe Fed’s positive assertion of the economy has renewed interest in the US dollar compared to the Euro.

outlook

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Again, the EURUSD chart shows the pair has been unable to breakout of the channel started in October, and failed again six weeks ago after reaching 1.1614. Last week’s candlestick further confirmed bearish continuation by closing as a dark cloud cover into previous bullish candlestick. This week, as long as price remains below 1.1338, I am bearish on EURUSD with 1.1090 as the target.

US retail sales, building permits and inflation reports are due later in the week.

AUDJPY

Since CPI data showed, Australian inflation fell 0.2 percent in the first quarter of the year, the Aussie dollar has lost about 827 pips. Currently, the commodity-backed currency is being weighed upon by drop in commodity prices and heightened global risks. With all the positive economic data, ranging from the fastest growth rate in four years to low unemployment rate, the currency remains unattractive as investors seem to doubt the viability of Governor Glenn Stevens claims regarding the economic outlook, especially with the fact that Australia depend on struggling China for exports and most of her manufacturing.

In fact, an investment manager who oversees the equivalent of about $11 billion in fixed income assets at BTIM in Sydney, Vima Gor published an odd analysis on Thursday, saying the Australian dollar is at far more risk than most people think, and predicted 40 cents.

While Japanese yen remain attractive and projected to be even more in demand as investors scramble for safe haven assets to curtail possible shortfall of brexit as markets await referendum result.

outlook

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From the chart, this pair has been trading in channel since October 2014 and lost a total of 2,421 pips, but after RBA cut interest rate by 25 basis points in April, the pair has failed to sustain price above 80.82 resistance level. Another confirmation is the last two rejection candlesticks (shooting stars) confirming rejection of higher prices, this week I am bearish on AUDJPY provided price remains below 80.82 resistance level while keeping an eye on Australia’s unemployment report and BOJ monetary policy statement due on Thursday. My target will be 75.83.

Last Week Recap

GBPCAD plunged 544 pips last week amid brexit, and hits our 1.8480 price target. But this week 1.8117 support level is our temporary setback and with Canadian dollar more likely to retreat with oil prices. I will be cautious and look for a sell below 1.8105 (2016 low), while targeting 1.7755.

GBPCADDaily

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GBPCHF lost over 505 pips last week after closing the Monday gap during Asian trading session on Tuesday. But with our target one and two met (496 pips), I will be careful trading this pair this week for the simple fact that both paired currencies are prone to brexit’s effect. That being said, I am bearish on GBPCHF provided 1.3926 resistance level holds, with 1.3507 as target.

outlook

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USDJPY last week view is the same this week, “its failure to break 111.65 resistance level after three attempts, and eventually breaching 107.47 support level on Friday, suggest that the continuation of the downward trend has started and as long as investors are yet to know the fate of EU and UK regarding the referendum, and the US June rate hike decision off the table. The Japanese yen remain attractive, especially with G7 agreement hindering BOJ from intervening in its gains.”

outlook

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This week, as long as 107.47 resistance level holds, I am bearish on USDJPY with 105.21 as the first target and 102.17 second target.

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

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Forex

Akinwumi Adesina Extols Africans in Diaspora on Cross-Border Remittance

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Akinwunmi Adesina - Investors King

African Development Bank (AfDB) President, Akinwumi Adeshina has extolled the tenacity and impacts of Africans in Diaspora on cross-border remittance.

According to the AfDB President, Africans in the diaspora are the continent’s largest financiers through their yearly remittances.

Speaking at an event organised by the Bank in collaboration with the African Union Commission, Adeshina noted that cross-border remittance into Africa is more than development assistance to the continent. 

Investors King earlier reported that remittance into Nigeria and other countries in the sub-Sahara Africa region hits $53 billion in 2022.

The AfDB President said, “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021. Yet official development assistance to Africa in 2021 was $35 billion, or 36% of the remittances from the diaspora”.

Adeshina added that Egypt and Nigeria are among the top-ten remittance recipients globally, with $31.5 billion and $19.2 billion, respectively in 2021. 

While speaking on the advantage of cross-border remittance to the African continent, the AfDB president noted that remittances have helped to meet financial, food, education, and health needs of many Africans, “it as well as serve as countercyclical sources of finance,” he said.

“The African diaspora has become the largest financier in Africa! And it is not debt, it is 100% gifts or grants, a new form of concessional financing that is the key for livelihood and security for millions of Africans” he added.

Similarly, Adeshina further positioned the need to eliminate premium charges on cross-border remittance into Africa. He noted that cross-border into Africa is twice what is it for South Asia.

He concluded that the Africans in diaspora can add more than remittance and investment, noting that they have skills, knowledge and know-how which can be needed for the development of the continent.

“They can help build world-class universities, and they can be mentors for the new generation of Africans,” he said. 

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eNaira

E-Naira Transaction Volume Rises to N5 Billion in November Amid Intensified Campaign

More Nigerians embrace eNaira wallet as CBN takes adoption campaign across the nation

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The Central Bank of Nigeria, (CBN) has disclosed that e-Naira transaction volume rose to a record N5 billion in the month of November following a series of campaigns initiated to encourage adoption.

Investors King had earlier reported how the e-Naira adoption team visited a number of parks in Abuja and the University of Lagos among other locations to drive the adoption of the digital currency. 

Speaking at the Second Edition of the Africa Cashless Payment Conference, CBN’s Director of Information and Technology, Hajiya Rakiya Mohammed noted that transaction on the e-naira platform does not attract any charges. 

She stated that Nigeria’s financial ecosystem is large to accommodate everyone.

Hajia Rakiya added that the e-Naira platform can be operated in any of Nigeria’s major local languages, stating that onboarding onto the e-Naira platform is a simple process. 

She further stressed that the primary goal of the e-naira is to reduce the amount of cash in circulation, thereby downsizing the cost of producing paper currency, increase in revenue and direct disbursement to citizens.

Meanwhile, the e-Naira circulation has reached N401.82 million as more Nigerians embraced the digital currency. 

It could be recalled that on October 25, 2021, CBN launched the e-Naira making Nigeria the first African country to have a digital currency. 

During the unveiling of the e-Naira in Abuja, President Muhammadu Buhari stated that the digital naira would increase remittances, foster cross-border trade, improve financial inclusion and enable the government to make welfare payments more easily.

On his part, the CBN Governor, Godwin Emefiele disclosed that the e-Naira offered Nigerians endless possibilities in using financial services. 

While admonishing more Nigerians to embrace the digital naira, Hajia Rakiya noted that “both banked and unbanked can use it, and it can be done through USSD *997#. We have integrated it with telecoms and NIBBS instant payments plus integration with money transfer operations so you can use e-naira for cross border”.

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Naira

CBN Will Redesign Naira Notes Every Five to Eight Years; Say Emefiele

The central bank will henceforth redesign the nation’s legal tender every five to eight years

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New Naira Notes

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the bank will henceforth redesign the nation’s legal tender every five to eight years.

The apex bank governor revealed at the unveiling of the new naira notes on Tuesday. 

Godwin Emefiele explained that the naira redesign is in line with global best practice noting that the naira needed to be redesigned and re-issued every five to eight years.

According to the CBN governor, previous administrations lacked the political will to approve the redesign of the naira notes. Stating that it is regrettable that the naira has not been redesigned for the past 19 years. 

“In the past, I have to confess that attempts by the CBN to redesign and re-issue the naira notes have been resisted. It is only President Muhammadu Buhari that has exhibited the courage to do so,” the CBN governor stated. 

Emefiele added that going forward, naira notes will be redesigned at intervals to address some peculiar issues. 

 “After today, the CBN will begin to redesign and reissue the naira every five to eight years,” he said. 

Investors King had earlier reported that President Muhammadu Buhari unveiled the redesigned naira notes at the Federal Executive Council (FEC) meeting today. 

Among those who joined the president with the unveiling include the CBN governor and the EFCC chairman.

Recall, in October, the CBN announced it will redesign the N200, N500 and N1,000 notes in line with its mandate.

Meanwhile, the CBN governor has disclosed that the new naira notes can not be counterfeited because of the features embedded in them. 

Similarly, he added that security agencies would be monitoring people making withdrawals at the counter to sniff out money laundering and unravel illegal usage. 

“The CBN has moved to a cashless economy. We will restrain the volume of cash someone will withdraw over the counter. We will follow up with the person’s data to know the reason for such withdrawal,” he concluded.

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