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Forex Weekly Outlook July 18 – 22

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Yuan

The US economy substantiated June’s 287,000 payrolls with a solid consumer spending last week, although inflation remains unchanged at 0.2 percent. There were evidences that an  increase in the cost of living cause by surging energy prices will pressure costs in the second half of the year. But with unemployment claims at 254,000 and industrial production rising from -0.3 percent to 0.6 percent, it is right to say the US economy is reasonably improving.

While it is wrong to downplay global risk, it is also nimble to note that Brexit effect in itself is yet to materialize, but that the financial markets are being driven by speculators, this is one of the reasons why the U.K. monetary policy committee held rates at 0.5 percent to assess the situation up until they believed Brexit would have crystallized.

Last week, the world‘s third largest economy, Japan also hinted at stimulus expansion and it’s plans to aid domestic consumption by weakening the yen to boost exports. The market is currently pricing in that possibility as it can be seen in yen pairs.  This week, EURUSD, AUD, and USDCAD top the list for me.

EURUSD

This particular pair has remained relatively stagnant after three attempts to break 1.1185 resistance level and sustain the upward trend started in October 2015. But with the US labor market rebounded — couple with solid consumer spending that erased all Euro-single currency gains against the US dollar last week. The US dollar may finally be heading to 1.0714 support level underscored three weeks ago.

EURUSDWeekly

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This week I remain bearish on EURUSD as long as 1.1090 resistance level holds.

AUDUSD

In June, Australia added 7,900 jobs down from 19,200 recorded in the previous month. While this is not entirely bad, the continuous gain of Aussie dollar is, especially after Glenn Steven’s comment on the danger of a strong Aussie dollar on the economy. Nevertheless, China’s lackluster economic data further compounded the prospect of the currency after yearly inflation drop to 1.9 percent and trade surplus plunged from 325bn to 311bn. It is only a matter of time before the Aussie economy reflects drop in China’s imports. This I believe will prompt the RBA to cut rates by 25 basis points, if not for anything but to halt surging currency and enhance its exports.

AUDUSDDaily

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The US dollar on the other hand has rebounded tremendously, following weak 38,000 jobs reported in May and has since boosted consumer spending with little to zero Brexit effect. This week I am bearish on Aussie dollar, because one, the upward trend started in May has been contained below 0.7700 price level and currently I don’t think the Aussie dollar is attractive enough to break 0.76690 resistance level.  If the 0.7484 support level (below 20-day moving average) is breached, it should pave way for 0.7379 and sustained break should open up 0.7143.

USDCAD

The Canadian economy is weighed on by weak manufacturing sector, but the Bank of Canada left interest rate unchanged at 0.5 percent on Wednesday, downplaying the effect of Brexit on the economy even though manufacturing sector is yet to pick up.

USDCADDaily

Click to enlarge

From the Chart, this pair has failed to break 1.3142 resistance level after four attempts, but established a sort of range between 1.2849 support level and 1.3142. This week, I am bullish on USDCAD with 1.3142 as the target, a sustainable break should open up 1.3387.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Naira

Naira Gained Slightly at I&E Forex Window to N412.81/$US

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Naira - Investors King

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.

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Dollar

U.S Dollar Jumps to Three Weeks High on Better Than Expected Retail Sales

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Dollar Cryptocurrency - Investors King

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.

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Naira

Naira Exchange Rates Today, Friday, September 17, 2021

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Naira Exchange Rates - Investors King

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

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
17/09/2021 560/570* 763/770* 647/655* 70/75 430/440 310/330
16/09/2021 560/570 763/770 647/655 70/75 430/440 310/330
15/09/2021 552/562 754/760 640/648 70/75 430/440 310/330
14/09/2021 550/557 754/760 640/645 70/75 430/440 310/330
13/09/2021 543/550 742/750 630/636 70/75 425/435 310/330
10/09/2021 538/545 738/745 630/636 70/75 420/432 310/330
09/09/2021 532/540 730/740 627/632 70/76 419/430 310/330
08/09/2021 528/535 723/730 623/629 70/75 419/426 310/330

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
17/09/2021 555/565 760/775 640/655
16/09/2021 548/555 753/765 635/645
15/09/2021 548/555 750/761 635/645
14/09/2021 548/555 750/761 635/645
13/09/2021 535/550 737/745 630/636
11/09/2021 530/547 735/745 630/635
10/09/2021 530/547 735/745 630/635
09/09/2021 528/538 730/738 625/630
08/09/2021 525/531 718/730 616/625

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
9/16/2021 US DOLLAR 409.57 410.07 410.57
9/16/2021 POUNDS STERLING 566.763 567.4549 568.1468
9/16/2021 EURO 482.0229 482.6114 483.1998
9/16/2021 SWISS FRANC 442.6827 443.2231 443.7635
9/16/2021 YEN 3.7434 3.748 3.7526
9/16/2021 CFA 0.7191 0.7291 0.7391
9/16/2021 WAUA 583.3071 584.0192 584.7313
9/16/2021 YUAN/RENMINBI 63.5338 63.6118 63.6898
9/16/2021 RIYAL 109.2012 109.3345 109.4678
9/16/2021 SOUTH AFRICAN RAND 28.3101 28.3446 28.3792

N.B: These tables are updated three times a day.

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