Forex

Pound Set to Extend Decline as Investors Anticipate BOE Rate Cut

Published

8 years ago

July 30, 2016

The pound looks set to extend its decline next week, when traders and economists predict the Bank of England will cut interest rates for the first time in more than seven years.

Sterling, which posted its third consecutive monthly drop against the dollar in July, has weakened versus all of its 31 major peers in the past three months. Britain’s vote in June to leave the European Union, along with recent economic data which underscored the ensuing setback to consumer confidence and business activity, have boosted speculation that the BOE will loosen monetary policy on Aug. 4.

All but two of the 46 economists in a Bloomberg survey forecast policy makers led by Governor Mark Carney will cut the key interest rate from a record-low 0.5 percent. While the median estimate in a separate survey was for the BOE to maintain its asset-purchase target at 375 billion pounds ($498 billion), the highest forecast of 525 billion pounds underlined the uncertainty over the extent of the BOE’s stimulus measures. The central bank will also release its quarterly Inflation Report.

“I think it’s a done deal that we’re going to get easing next week, but the question is just how aggressive,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “If we get a package of measures and not just a rate cut it will reinforce the weakening trend for the pound.”

Monthly Declines

The pound slid 0.3 percent this month to $1.3272 as of 5 p.m. London time Friday, having tumbled almost 9 percent in the previous two months. It dropped to a 31-year low of $1.2798 on July 6. Sterling weakened for a second month versus the euro, losing 0.9 percent to 84.16 pence.

Hardman said the U.K. currency was likely to end the year at $1.24, a level last seen in 1985.

BOE Monetary Policy Committee member Martin Weale shifted from his usually hawkish stance this week and supported immediate stimulus, boosting speculation the central bank will ease policy. Swaps signaled a 100 percent chance of a rate cut next week.
With such odds priced in, there is a risk policy measures fall short of what markets are predicting. The BOE voted 8-1 to refrain from any action this month, which prompted the pound to rally to its highest level in two weeks against the dollar.

‘Shock and Awe’

With traders bracing for the BOE to ease policy next week, Hardman said “it is a higher hurdle for them to out-dove current market expectations” and that could “help to potentially dampen the negative pound reaction.”

Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London, said the BOE may need to do more than the market is predicting to impact heavily on the currency.

“To be more bearish than what is factored, I would suggest a 40 basis-point cut and 50 billion pounds further on the QE front,” Jones said. “That would take it to beyond expectations and should provide a bit of an element of shock and awe. That would probably be the upper limits of what we could expect in terms of further measures.”

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Samed Olukoya

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.

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Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Published

2 days ago

May 17, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight improvement in the Naira exchange rate when compared to today’s 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: ₦1,540
Selling Rate: ₦1,530

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.

Forex

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

Published

2 days ago

May 17, 2024

Samed Olukoya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Published

3 days ago

May 16, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 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.