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Forex Weekly Outlook June 20 – 24

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Forex weekly outlook

Forex Weekly Outlook June 20 – 24

 

Global financial uncertainties continued this week, after data showed inspite of growing US economy the slowdown in job market weigh on growth. The British referendum is also in focus as the Britain go to the poll on Thursday 23 of June to decide their membership in the European Union.

Here is the highlight of last week.

US – The Federal Reserve held rates unchanged citing global growth concerns and UK’s EU referendum uncertainties, a move that drove the dollar lower against its counterparts. Even after predicting the economy will still grow 2 percent this year but 0.1 percent lower than previously forecast 2017 growth rate.

UK – The pound rose about 1 percent on Friday after campaign for the Brexit referendum was suspended on Thursday following the killing of Jo Cox, a Labour Party member and supporter of EU membership.

NZ – New Zealand economy rebounded once again with a better than expected GDP, amid escalating Auckland housing market. Although, economic growth was below 0.9 percent recorded previously, still better than 0.5 percent predicted by economists. The Kiwi climbed as high as 71.46 cents against the US dollar, its highest in over a year.

Japan – The Bank of Japan continues its struggle with the surging yen and has reiterated its readiness to intervene in what Japan Financial Minister Taro Aso described as one sided move that is hurting their economy. The yen gained against the US dollar reaching two year low on Friday.

Australia – Unemployment rate remains the same 5.7 percent in May and labour market added 17,900 part-time jobs, but the Aussie dollar failed to respond likewise after National Australia Bank (NAB) data showed business confidence dropped from 5 to 3 in May, suggesting businesses are worried about sustainability.

Canada – Canadian economy is still yet to find its rhythm after Alberta wildfire disrupted oil production, though the unemployment rate improved from 7.1 percent to 6.9 percent, the inflation rate plunged to 1.5 percent from 1.7 percent in May. The loonie lost 65 percent of its last week gain against the US dollar after peaking at 1.3084, below 1.3142 resistance level.

This week, German ZEW Economic Sentiment, Australia Monetary Policy Meeting Minutes, US Fed Chair Yellen Testifies, US Core Durable Goods Orders, German Ifo Business Climate and of course EU Membership Vote top the list. This week I will be looking at GBPCAD, EURGBP, and GBPCHF.

GBPCAD

Once again referendum outcome will determine GBP price direction this week, but with current situation and emotional sentiment created by the murder of Jo Cox, I am leaning towards “stay” vote even more.

Last week, I said in a group “This week, I am bullish on Yen, Dollar and bearish on Aussie but wary of GBP even with Brexit leading, I am sure they are not going to leave the EU just yet and I expect GBP to hit some real high price level as it becomes obvious”. That was on 7th Monday before Thursday incident.

Forex weekly outlook

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Prior to that, we’ve been selling GBPCAD since June 6, when the price was around 1.8745, but last week after failing to sustain a break of 1.8117 support level and forming a double bottom candlestick/bullish engulfing pattern that further validated 1.8117 as a solid support, and also confirm bullish run. This week as long as price remain above 1.8480 I am bullish on GBPCAD with 1.8745 as the first target. A vote in favour of Brexit will invalidate this view.

GBPCHF

This pair has called a bottom at 1.3413 in April when it failed to sustain a breach of 1.3507 support level and eventually breaking the downward trend on the 19th of the same month before hitting a 9-week low (high-lows) on Thursday last week. This week I remain bullish on GBPCHF after breaking 1.3926 previous resistance level for similar reasons I stated above a close above 1.3926 should open up 1.4197.

Forex weekly outlook

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EURGBP

Euro-area economy is still struggling, so is the UK but the single 19-nation currency has been more favoured with Brexit uncertainties when compared with the pound. The Euro-area economic data does not support the current bullish run of this pair and as always, a disparity in market price and economic data is alarming. This week as long as price remain below 0.7846 I am bearish on EURGBP, while targeting 0.7600. Please keep an eye on Brexit.

Forex weekly outlook

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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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enaira

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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