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Pound Drops as U.K. Manufacturing Output, House Prices Fall

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U.K. pound

The pound declined, halting a five-day advance, as reports showed declines in U.K. house prices and manufacturing output in the aftermath of the nation’s vote to leave the European Union.

Sterling also weakened against the euro after separate reports showed home prices slipped 0.2 percent in August and manufacturing fell a bigger-than forecast 0.9 percent the previous month. Currency traders also will focus on Bank of England Governor Mark Carney’s comments on Wednesday as he testifies before lawmakers following the BOE decision’s to boost monetary stimulus in August.

The data may temper optimism about the resilience of the economy following a recent set of positive surveys which showed that the U.K. was weathering the fallout from Brexit better than many analysts had predicted. While the currency has gained about 2 percent against the dollar in September, it’s still down 10 percent against the greenback since Britain voted in June to leave the European Union.

“Data this morning are a tad disappointing and that is weighing on the pound,” said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd in London.

The pound fell 0.4 percent to $1.3387 as of 9:49 a.m. in London, after climbing Tuesday to $1.3445, its highest level since mid-July. It weakened 0.3 percent to 83.98 pence per euro.

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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Pound

British Pound Extends Decline as 44 British Lawmakers Resigns

British Pound sustained its decline against the United States Dollar and other global counterparts on Wednesday after five additional British lawmakers resigned their positions in protest against a series of scandals rocking the House of Commons in recent weeks.

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British pound

British Pound sustained its decline against the United States Dollar and other global counterparts on Wednesday after five additional British lawmakers resigned their positions in protest against a series of scandals rocking the House of Commons in recent weeks.

A total of 44 British lawmakers have resigned under Prime Minister Boris Johnson’s leadership, accusing the Prime Minister of engaging in or condoning actions that put parliament moral in question.

Against the American Dollar, Great Britain Pounds (GBP) dropped from 1.2164 it peaked on Monday to 1.1934 in the early hours of Thursday.

While against the Japanese Yen, one of the world’s safe-haven currencies, GBP exchanged at 162.02, down from 165.26 it traded on Tuesday.

The decline was broad-based as the embattled GBP also lost some ground against the Swiss Franc to exchange at 1.1568, down from about 1.1687 on Tuesday.

On Wednesday,  five lawmakers signed in one go. In their letter, they said “It has become increasingly clear that the Government cannot function given the issues that have come to light and the way in which they have been handled,” they wrote.

Selaine Saxby, Claire Coutinho and David Johnston were the latest lawmakers to tender their resignation on Wednesday.

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Naira

Naira Plunges to N621 at Black Market

The Nigerian Naira remained under pressure at the unregulated parallel market popularly known as the black market on Tuesday.

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Naira - Investors King

The Nigerian Naira remained under pressure at the unregulated parallel market popularly known as the black market on Tuesday. The Naira exchanged at N621 to a United States Dollar amid persistent foreign exchange scarcity.

At the Investors and Exporters’ forex window, the local currency dropped to N425.75 against the United States Dollar after opening the day at N422.25/US$1 on Monday. Forex traders in that segment of the forex market transacted $47.56 million in value and volume, Investors King reports.

However, Naira improved slightly against the U.S Dollar at the Central Bank of Nigeria (CBN) forex section. Naira exchange rate to dollar improved marginally from N415.86/US$ to N415.8.

Against the Pounds Sterling, the Nigerian Naira declined in value to N505.6544 from N500.6539. Similarly, against the European common currency, the local currency dipped slightly in value from N434.0331 to N434.7605.

Crude Oil

Oil prices dropped by $6 on Tuesday as concerns over the global recession containing demand outweighed supply concerns.

Brent crude oil, the international benchmark for Nigerian oil, declined by $6.65 to $106.85 a barrel while the U.S. West Texas Crude Oil lost $5.65 to $102.78 a barrel.

“Oil is still struggling to break out from its current recessionary malaise as the market pivots away from inflation to economic despair,” Stephen Innes of SPI Asset Management wrote.

Crude oil remains an important commodity for the Nigerian economy given its nature as a mono-product economy. Africa’s largest economy relies on crude oil revenue to service its economy and sustain its currency value against its global counterparts.

However, the inability to prop up crude oil production despite the increase in oil prices continued to hurt Nigeria’s foreign reserves and the availability of dollars in the economy. Hence, the Nigerian Naira is presently trading at a record low of N621 to a United States Dollar.

Cryptocurrency Exchange Rates

Global economic uncertainty ahead of the projected recession continues to dictate the performance of the cryptocurrency space in recent weeks.

Bitcoin extended its decline by 2.37% in the last 24 hours to $19,387.33 per coin. ETH, a token of the Ethereum protocol, lost 3.09% of its value to $1,079 a coin.

Meanwhile, Meta, formerly known as Facebook, has suspended its cryptocurrency project called Libra.  Celsius, a cryptocurrency lender, has paused withdrawals and announced plans to cut 150 jobs.

Cryptocurrency space market value dropped from over $2.5 trillion at its peak to about $900 million presently. The huge decline forced several players to cut losses and halt capital inflow into the cryptocurrency space.

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Naira

Dollar to Naira Today Wednesday, 29 June 2022

The dollar to naira exchange opened the day at N420.70 to a U.S. Dollar on Tuesday and closed at N421, representing a decline in value of N0.30.

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Naira Exchange Rates - Investors King

The dollar to naira exchange rate today Wednesday, 29 June 2022 remained largely unchanged at the Investors and Exporters forex window and the Central Bank of Nigeria (CBN)’s section of foreign exchange.

The dollar to naira exchange opened the day at N420.70 to a U.S. Dollar on Tuesday and closed at N421, representing a decline in value of N0.30. Forex traders transacted 206.65 million dollars at the official Investors and Exporters window on Tuesday.

In the CBN forex section, U.S. Dollar was sold at N415.6 by the apex bank to authorised dealers, slightly better than N415.64 it exchanged on Monday.

Against the Pounds Sterling, the Naira appreciated from N509.824 to N508.53. However, against the Euro common currency, the value of the Naira dropped from N433.05 on Monday to N439.5 on Tuesday.

Dollar to Naira Black Market Exchange Rate

Forex scarcity continued to drag on the Naira value in the unregulated foreign exchange market popularly known as the black market.

On Wednesday, the Naira was exchanged at N614 for a United States Dollar on the black market. Representing another decline of N7 from N607 it was sold two weeks ago.

According to traders in that section of forex, rising demand amid a chronic scarcity is responsible for the wide foreign exchange rate of the local currency and could worsen if developed economies plunge into recession as widely projected.

Inflow into emerging economies like Nigeria will drop, hence impeding the apex bank’s ability to service the economy.

Crude Oil

Crude oil extended its gains for four consecutive days on Wednesday after it became obvious that OPEC and its allies will not be able to meet their targets as projected.

Brent crude oil, the international benchmark for Nigerian oil, appreciated to $120 a barrel on Wednesday while the U.S West Texas Intermediate (WTI) rose from $99.33 per barrel a week ago to $112.37 per barrel.

According to Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA, said “A surprise drop by US API Crude Inventories by 3.8 million barrels helped the bullish momentum, with markets ignoring the rise in refined product stocks. Disruptions to Libyan and Ecuadorian production were supportive, but the Macron’s remarks yesterday around Saudi Arabia and the UAE’s limited production capacity seems to have been the main driver.”

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