Connect with us

Forex

Pound Volatility Gauge Climbs as Traders Brace for BOE Rate Cut

Published

on

Sterling has crumbled to a three-decade low against the dollar after the Brexit vote

A measure of overnight potential price swings for the pound against the dollar approached the highest closing level since Britain voted to leave the European Union in June as traders braced for the Bank of England’s policy decision Thursday, which most economists forecast will bring the first interest-rate cut in seven years.

Sterling fell versus all but one of its 16 major peers as swaps pricing showed a 100 percent chance of a rate cut. While all except two of 52 analysts in a Bloomberg survey forecast a reduction, there are a suite of other measures, including an expansion of its bond-purchase program, which the BOE may adopt to tackle a Brexit-induced fallout which are more difficult to predict.

Some economists said they would not rule out the possibility that the BOE will keep its powder dry at this meeting, as it did in July, while awaiting a clearer economic picture.

“There is quite a lot of speculation regarding what the BOE might do today, so the short-term volatility is to be expected,” said Mark Dowding, a London-based partner and money manager at BlueBay Asset Management LLP. “We doubt the BOE would be opposed to the idea of the pound falling further as it would support the growth outlook, which is deteriorating markedly. We see the pound falling to $1.20 or lower by the end of the year.”

Sterling fell 0.3 percent to $1.3287 as of 7:41 a.m. in London. It dropped to a 31-year low of $1.2798 on July 6. The U.K. currency weakened 0.2 percent to 83.85 pence per euro.

Volatility Climbs

Overnight implied volatility for the pound versus the dollar, a measure of anticipated price swings based on options, was at 31 percent, data compiled by Bloomberg show. It touched the highest level on record on June 23, the day of Britain’s EU referendum, and spiked again before the BOE’s July meeting, its first since the historic vote.

The pound has been the biggest loser versus the dollar among major currencies since Britain voted to leave the world’s biggest trading bloc. The Bloomberg Pound Index, which measures the currency against its major peers, has fallen almost 11 percent since the referendum.

Recent economic data suggested Britain’s decision to leave the EU is taking its toll on business confidence and that’s further supported by a report Wednesday that confirmed U.K. services shrank last month at the fastest pace in seven years. Swaps pricing showed a 100 percent chance of a rate cut by the BOE Thursday, compared with about 15 percent before the vote.

“I expect a 25 basis-point rate cut and 100 billion pounds” in QE, said Richard Benson, managing director and co-head of portfolio investment at Millennium Global Investments in London. “However, it is very popular to be fading the BOE and buy the pound. I do not think it’s the correct trade. The post-Brexit depreciation of around 10 percent seems too little to me.”

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.

Naira

Dollar to Naira Black Market Today, February 23rd, 2024

As of February 23rd, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,610 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

on

Naira Dollar Exchange Rate - Investors King

As of February 23rd, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,610 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,650 and sell it at N1,640 on Thursday, February 22nd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate improved when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

  • Buying Rate: N1,610
  • Selling Rate: N1,600

Continue Reading

Naira

Naira Appreciates Slightly to N1,542.58/$ at NAFEM

Published

on

New Naira notes

The Naira appreciated marginally against the United States dollar, closing at N1,542.58/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday.

This modest gain represents a 2.9 percent appreciation from the previous day’s rate of N1,598.54, highlighting a nuanced fluctuation in the currency’s value.

According to data sourced from the FMDQ Securities Exchange, a platform overseeing FX trading in Nigeria, the Naira’s journey throughout the trading day was marked by an intra-day high of N1,755 and a low of N1,050.

Moreover, the total foreign exchange turnover surged to $172.14 million, indicating a 47 percent increase from the previous day.

Despite the Naira’s marginal gain at NAFEM, concerns persist regarding the widening gap between the official and parallel market rates.

The Naira’s depreciation to N1,900 against the dollar in the parallel market before it moderated to N1,687 later in the day.

Analysts and Bureau De Change operators foresee further pressure on the Naira, with predictions of a potential all-time low of 2,000/dollar at the parallel market in the coming weeks.

The demand for the greenback continues to fuel volatility, prompting regulatory actions from entities like the Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) to curb speculative activities.

As stakeholders monitor the currency’s trajectory, the CBN’s efforts to address forex liquidity challenges and stabilize the Naira remain under scrutiny amidst evolving market dynamics.

Continue Reading

Forex

Police and EFCC Personnel Raid Bureau De Change Outlets in Ibadan’s Sabo Area

Published

on

Bureau De Change Operator

In a concerted effort to curb illicit currency dealings and stabilize the nation’s currency, Nigerian security operatives, including police and Economic and Financial Crimes Commission (EFCC) personnel, launched a raid on Bureau De Change (BDC) outlets in Ibadan’s Sabo area.

Sabo, a prominent district in Ibadan, the capital of Oyo State, serves as a central hub for currency exchange activities in the region.

Videos circulated on social media platforms captured the dramatic scene as armed security personnel and their convoy descended on the bustling Sabo Road.

The raid comes amidst growing concerns over the depreciation of the Nigerian naira, which hit record lows against major foreign currencies, including the dollar.

Sources revealed that the naira’s value reached alarming levels, with exchanges as high as N1980 to $1 on the parallel market and N1780 on the official market.

President Bola Tinubu’s administration has intensified efforts to crack down on individuals involved in currency racketeering, aiming to restore stability to the nation’s economy.

The clampdown signals a firm stance against illegal currency trading and serves as a deterrent to those engaging in speculative activities.

While the raids may disrupt illicit operations, they also underscore the government’s commitment to restoring confidence in the financial sector and promoting transparency in currency exchange practices.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending