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Dollar Boosted by Hawkish Fed Comments as Oil Drops With Gold

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Dollar to Naira Exchange Rate - Investors King

The dollar strengthened versus all of its major peers as hawkish comments from a Federal Reserve official boosted the likelihood of a U.S. interest-rate increase this year. The yen’s retreat was spurred by prospects for further monetary easing in Japan, while oil dropped with gold.

Dollar index rose to a one-week high after Fed Vice Chairman Stanley Fischer said Sunday the U.S. economy is already close to meeting the central bank’s goals and that growth will pick up. The yen fell for a second day and Japanese stocks advanced after Bank of Japan Governor Haruhiko Kuroda flagged the possibility that the authority’s unprecedented monetary stimulus will be added to in September. Elsewhere in Asia, most shares declined as oil fell to about $48 a barrel. Silver led losses among precious metals.

Global markets have been buffeted by comments from Fed officials flagging the possibility of higher borrowing costs as early as next month, even though minutes of the central bank’s last meeting struck a more dovish tone. The focus will shift to Janet Yellen’s speech this week in Jackson Hole, Wyoming, where top global central bankers will gather for a meeting. Futures traders on Friday assigned a 22 percent probability to a September rate increase by the Fed, up from 16 percent a week earlier.

“Janet Yellen’s speech on Friday will have the biggest impact on short-term market moves, especially if she follows in Stanley Fischer’s relatively hawkish tone,” said Angus Nicholson, a market analyst at IG Ltd. “A week of talking up the U.S. dollar will be good for U.S. financial stocks that would benefit from a rate rise and some of that positivity could spread over into financials globally.”

Currencies

Dollar Spot Index rose 0.4 percent as of 11:16 a.m. Tokyo time, after losing ground in each of the last two weeks. South Korea’s won fell 0.8 percent versus the greenback and New Zealand’s dollar lost 0.7 percent, the biggest declines among 16 major currencies.

“We expect the dollar to consolidate this week with a modest upside bias,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney. “There is room for U.S. interest-rate expectations to adjust a bit higher this week.”

The yen dropped 0.5 percent to 100.73 per dollar. Kuroda told the Sankei newspaper that the BOJ is conducting a comprehensive review of Japan’s economy and finances and said there is “sufficient chance” of more easing at next month’s policy meeting. Softer July inflation data this Friday may raise odds for more aggressive BOJ easing, Haddad said.

Forwards on India’s rupee were little changed after India named Urjit Patel to take over from Raghuram Rajan as central bank governor from Sept. 4.

Stocks

Japan’s Topix index added 0.5 percent as the yen’s decline boosted exporters including Toyota Motor Corp., which was headed for its highest close since March.

About three stocks fell for every two that rose on the MSCI Asia Pacific excluding Japan Index, with raw-materials producers leading losses among 10 industry groups. South Korea’s Kospi index slipped from a 13-month high as foreign investors pulled funds from the securities for the first time in a week, while Taiwan’s benchmark was set for its lowest close in a month. Hong Kong’s Hang Seng Index rose 0.1 percent, after retreating from a nine-month high on Friday.

Futures for the S&P 500 Index fell 0.1 percent after the gauge ended last week within 0.3 percent of an all-time high. Pfizer Inc. is close to an agreement to buy Medivation Inc. for about $14 billion and a deal may be announced as early as Monday, according to people familiar with the situation.

Commodities

Crude oil declined 1.1 percent to $48.01 a barrel in New York after Iraq, OPEC’s second-biggest producer, said it will boost exports by about 5 percent amid a glut of supply. The price jumped 9.1 percent last week on speculation that OPEC talks next month could lead to an output freeze. U.S. drillers added rigs for an eighth week, the longest run since April 2014, Baker Hughes Inc. data show.

Silver dropped as much as 3 percent to a seven-week low, while gold was down 0.6 percent amid the dollar’s advance. Silver has rallied 37 percent this year while gold jumped 26 percent as the Fed refrained from tightening and other central banks embraced negative rates, benefiting bullion which doesn’t pay interest.

Bonds

U.S. Treasuries due in a decade fell, pushing their yield up by one basis point to 1.59 percent. The yield could climb toward 1.70 percent if Yellen’s remarks are along the lines of those made by Fischer when she delivers her address on Friday, according to Su-Lin Ong, a senior economist at Royal Bank of Canada in Sydney.

“The market is clearly susceptible to Yellen making similar comments in Jackson Hole,” Ong said. “The most recent lot of Fed speakers — and these are key speakers — have signaled that the market should be putting a greater weight on the risk of a move before year-end.”

Australia’s 10-year bond yield increased by five basis points to 1.91 percent and Japan’s rose by one basis point to minus 0.08 percent.

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

Naira Hits Eight-Month High at 1,120/$ Amidst Central Bank Reforms

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New Naira Notes

The Nigerian Naira has surged to an eight-month high of 1,120 against the US dollar on the parallel market, commonly referred to as the black market.

This significant appreciation comes on the heels of a series of foreign exchange (FX) reforms initiated by the Central Bank of Nigeria (CBN), which have effectively unlocked dollar liquidity within the economy.

According to data compiled from online platforms and street traders, the current exchange rate reflects a gain of 62.95% for the Naira against the dollar compared to its level of 1,825 per dollar in February 2024.

Market sentiment suggests that the recent strengthening of the Naira can be attributed to a subdued demand for the US dollar, coupled with ample liquidity in the market, particularly during the holiday period.

Despite a decline in external reserves, Nigeria’s currency strengthened to 1,230.61 per dollar on the official FX market before the holidays.

The recent uptick in the Naira’s value follows the CBN’s decision to review the exchange rate for Bureau De Change (BDC) Operators to 1,101 per dollar from 1,251 per dollar.

Also, the CBN announced plans to sell $15.88 million to 1,588 eligible BDCs, further bolstering dollar liquidity in the market.

The CBN’s proactive approach to FX management, including the resolution of foreign exchange backlogs amounting to US$7 billion, has instilled confidence among investors and market participants.

Furthermore, the apex bank’s commitment to implementing reforms aimed at enhancing transparency and efficiency in the FX market has yielded positive results.

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Forex

Zimbabwe’s Gold-Backed Currency Surges 0.2% Against US Dollar

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Zimbabwe’s newly introduced gold-backed currency, known as ZiG, surged by 0.2% against the US dollar on its second day of trading.

This development has sparked both cautious optimism and renewed concerns about the nation’s financial stability.

The Reserve Bank of Zimbabwe reported that the exchange rate for ZiG strengthened to 13.53 per US dollar, compared to its initial rate of 13.56 per dollar on its debut trading day.

The slight but significant uptick in value comes as a welcome sign for Zimbabwean authorities who have been striving to establish a functional local currency amid persistent economic challenges.

The ZiG currency, introduced as the country’s sixth attempt to stabilize its monetary system, is backed by 2,522 kilograms of gold and approximately $100 million in foreign currency reserves held by the central bank.

This gold backing is seen as a crucial step to restore confidence in Zimbabwe’s currency after years of hyperinflation and currency instability.

Despite the positive momentum witnessed in the currency market, the transition to ZiG has not been without its hurdles. Banks, retailers, and utilities across the nation have been grappling with the logistical challenges of adopting the new currency, leading to disruptions in commerce nationwide.

Many businesses are still in the process of updating their systems to accommodate ZiG transactions, causing delays and confusion in payment processing.

The Zimbabwean government has set a deadline of April 12 for businesses to fully transition their electronic systems to ZiG.

However, reports indicate that only a third of the financial institutions linked to the national payments platform have been able to process ZiG payments effectively, highlighting the ongoing challenges facing the currency transition.

While the surge in ZiG’s value against the US dollar offers a glimmer of hope for Zimbabwe’s economic prospects, experts caution that sustained stability will depend on factors beyond short-term fluctuations.

Market confidence, effective monetary policies, and structural reforms will all play crucial roles in determining the long-term viability of the ZiG currency and the broader economic recovery efforts in Zimbabwe.

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Naira

Dollar to Naira Black Market Today, April 9th, 2024

As of April 9th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,200 NGN in the black market, also referred to as the parallel market or Aboki fx.

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New Naira notes

As of April 9th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,200 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 N1,240 and sell it at N1,230 on Monday, April 9th, 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: N1,200
  • Selling Rate: N1,190

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