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Forex

Forex Weekly Outlook September 12 – 16

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forex

Early last week the US dollar slid after data revealed that the services sector that have been supporting the economy contracted from 55.5 in July to 51.4 in August, before gaining back part of its losses as the odds of the Federal Reserve raising rates this month increases. While the majority of analysts have favoured September rate hike, I have my reservation for several reasons, one, the weak manufacturing sector and contraction in the activities of the services sector are some of the key criteria mentioned by the Fed Chair Janet Yellen during Jackson Hole speech for rate decision.

Two, even though the unemployment rate (4.9%) is near a record low and employers are said to be having trouble finding qualified and skilled workers, and are hesitant to dismiss employees, average hourly earnings rose less than expected in August. All these coupled with worse than expected second quarter economic growth rate (1.1%) are likely to compel the Federal Open Market Committee to hold back, at least to monitor improvement this third quarter before increasing borrowing cost.

Nevertheless, the retail sales that came out flat (0.0%) in July is due this week and expected to drop even further to -0.1 percent by economists, while the producer price index that measures consumer inflation is expected to rise just 0.1 percent in August from July 0.4 percent decline.

China, the world’s second largest economy, consumer price inflation dropped to its weakest in almost a year last month, but the producer price index moderated slightly from -1.0 percent to -0.8 percent in August. Also, China’s imports rose for the first time in almost two years last month as businesses restocked and wholesale inflation expectations rose. While, some analysts have interpreted it as a sign of steady economy, it is too early to deduce the direction of China’s economy, especially with exports slowing and credit risks rising as the People’s Bank of China continued to expand monetary easing.

In Australia, the seemingly positive Chinese data briefly aided Aussie dollar to 77.31 against the US dollar, before slumping nearly a whole cent to 75.36, after the RBA Governor Glenn Stevens said any further appreciation in the local currency could give Australia trouble. This, with a slowdown in economic growth rate in the second quarter to 0.5 percent and housing issues in some of the biggest Australian cities are issues the incoming RBA governor must address. This week, Australian unemployment rate, employment change and NAB business confidence are due.

The European Central Bank shocked the markets last week when Mario Draghi said the central bank doesn’t need to commit to fresh stimulus and left interest rates unchanged, even with inflation below 2 percent target and progress slowing as Brexit continued to weigh heavily on the world’s single largest market just six months to the end of the current Quantitative Easing. The 25-member Governing Council has decided to keep its main refinancing rate at zero, the deposit rate at – 0.4 percent and asset purchases at about 80 billion euros ($90 billion) a month until March 2017.

Draghi knows what has to be done — asset purchases will have to continue beyond March 2017 — but it seems too many of the council want to delay the decisions over what to buy and for how long,” said Richard Barwell, senior economist at BNP Paribas Investment Partners in London. “In the meantime, Draghi struggled manfully not to raise expectations of the inevitable.

This week, I will refer to the analysis of AUDUSD and EURUSD Forex three weeks ago.

AUDUSD

Three weeks ago, I said Australian dollar is overpriced. Below are my exact words.

audusddaily

Click to enlarge

For a while the Australian dollar has been overpriced, but yet continued to gain against the US dollar and its peers. Last week, sellers jumped on the pair immediately Fed officials signals possibility of the Federal Reserve raising rates later in the year, and break the ascending channel started on May 30. This week, if the markets continue to price in that possibility, the strong dollar will likely weigh on the pair and may finally give us 0.7505 as explained last week. I believe a technical break below the ascending channel should be enough to force traders to start pricing in the 25 basis points cut. This week, I am bearish on this pair as long as 0.7673 resistance holds.

EURAUD

This week, the ECB further strengthen our position by keeping rates unchanged and downplaying stimulus expansion.

eurauddaily

Click to enlarge

This pair has gained 487 pips since Aug 11th, and positioned for even more. Here is why I think this pair may offer buyers opportunity, the Euro-area has shown resilience since the U.K exit the European Union, and has complemented its moderate fundamental with strategic monetary policy. Another reason is the U.K post-Brexit retail sales report released last week, would likely reduce the heavy negativity surrounding the Brexit and boost the business activities of the Euro-area.

Technically, after breaking 1.4665 resistance on Wednesday, the Thursday’s candlestick that closed as a bullish pin bar on the daily time frame was the first sign of bullish continuation. While the morning start pattern formed on weekly time frame validate this stance. This week, as long as 1.4665 support holds, I am bullish on this pair with 1.5008 as the Forex target.

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.

Forex

Dollar Pulls Back as the World Prepares for New US President

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Global debt

Dollar Pulls Back as the World Prepares for New US President

US Dollar pulled back on Tuesday ahead of Joe Biden’s inauguration following a week of consistent gains.

The United States dollar pared gains against the European common currency to $1.21444 per Euro as investors abandoned the greenback for Gold and other haven assets ahead of Wednesday’s inauguration.

Against New Zealand Kiwi, the dollar was largely unchanged and remained steady within 0.70787 support level and 0.71401 resistance level.

However, against the Japanese Yen, the United States Dollar gained on Tuesday to 103.966.

Despite the uncertainties surrounding global growth and COVID-19 vaccine deployment, OPEC is bullish on oil demand in 2021.

In its latest outlook for the year, OPEC left demand unchanged for the year even as experts are projecting disruption from U.S producers given the series of stimulus planned by the incoming administration.

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Naira

Daily Naira Exchange Rates (Black Market, CBN Official Rates, Bureau De Change) Monday, January 18, 2021

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interbank

Daily Naira Exchange Rates (Black Market, CBN Official Rates, Bureau De Change) Monday, January 18, 2021

Naira exchange rate decline to N642 against the British Pound and remained pressure at N475 and N580 against the US Dollar And Euro, respectively.

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
18/01/2021 470/475 635/642 572/580 60/70 375/385 245/293
15/01/2021 470/475 635/642 573/580 60/70 375/385 245/293
14/01/2021 470/475 630/640 570/580 60/70 375/385 245/293
13/01/2021 470/474 630/637 570/580 60/70 375/385 245/293
12/01/2021 470/475 630/637 575/580 60/70 375/385 245/293
11/01/2021 468/675 625/635 575/582 60/70 372/382 245/293
08/01/2021 467/672 622/630 570/575 60/70 365/378 245/293
07/01/2021 465/470 620/628 570/575 60/70 365/378 245/293
06/01/2021 465/470 620/628 565/570 60/70 365/378 245/293
05/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
04/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
31/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
30/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
29/12/2020 465/470 620/628 565/573 60/70 365/378 245/293
28/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
25/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
24/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
23/12/2020 470/475 622/632 575/580 60/70 350/367 245/293
22/12/2020 472/476 622/630 570/578 60/70 340/362 250/295
21/12/2020 472/476 622/632 570/580 55/68 340/362 250/295
18/12/2020 472/477 622/630 570/577 55/68 340/362 250/295

 Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
18/01/2020 460/475 635/643 570/580
15/01/2020 460/475 630/638 570/577
14/01/2020 460/475 630/638 570/577
13/01/2020 460/470 626/633 565/576
12/01/2020 460/470 626/633 566/576
11/01/2020 460/470 620/630 560/573
08/01/2020 460/470 615/625 555/573
07/01/2020 460/470 615/623 550/570
06/01/2020 460/470 610/623 550/572
05/01/2020 460/470 615/624 550/572
04/01/2020 460/470 615/624 550/572
31/12/2020 460/470 600/626 550/573
30/12/2020 460/470 600/626 550/573
29/12/2020 455/475 600/626 550/573
28/12/2020 455/475 605/628 555/573
25/12/2020 455/475 600/628 550/575
24/12/2020 455/474 600/628 555/575
23/12/2020 460/475 621/632 568/580
22/12/2020 470/475 620/631 568/577
21/12/2020 470/475 620/631 568/577

Central Bank of Nigeria (CBN) Official Naira Exchange Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
1/15/2021 US DOLLAR 379 379.5 380
1/15/2021 POUNDS STERLING 516.9181 517.6001 518.282
1/15/2021 EURO 459.4996 460.1058 460.712
1/15/2021 SWISS FRANC 426.8499 427.413 427.9761
1/15/2021 YEN 3.6548 3.6596 3.6644
1/15/2021 CFA 0.6839 0.6939 0.7039
1/15/2021 WAUA 545.8708 546.5909 547.3111
1/15/2021 YUAN/RENMINBI 58.531 58.6087 58.6864
1/15/2021 RIYAL 101.0236 101.1568 101.2901
1/15/2021 SOUTH AFRICAN RAND 24.8724 24.9052 24.938

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Naira

Daily Naira Exchange Rates (Parallel Market, Bureau De Change and CBN Rates); Friday, January 15, 2021

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Nigeria 500 naira notes

Daily Naira Exchange Rates (Parallel Market, Bureau De Change and CBN Rates); Friday, January 15, 2021

The Nigerian Naira remained under pressure against the United States Dollar on the parallel market at N475 exchange rate, while the value has not improved against the Euro and Pound, inflation rose to 15.75 percent in the month of December to further compound Nigeria’s predicament.

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
15/01/2021 470/475 635/642 573/580 60/70 375/385 245/293
14/01/2021 470/475 630/640 570/580 60/70 375/385 245/293
13/01/2021 470/474 630/637 570/580 60/70 375/385 245/293
12/01/2021 470/475 630/637 575/580 60/70 375/385 245/293
11/01/2021 468/675 625/635 575/582 60/70 372/382 245/293
08/01/2021 467/672 622/630 570/575 60/70 365/378 245/293
07/01/2021 465/470 620/628 570/575 60/70 365/378 245/293
06/01/2021 465/470 620/628 565/570 60/70 365/378 245/293
05/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
04/01/2021 465/470 620/628 565/572 60/70 365/378 245/293
31/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
30/12/2020 465/470 620/628 567/573 60/70 365/378 245/293
29/12/2020 465/470 620/628 565/573 60/70 365/378 245/293
28/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
25/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
24/12/2020 460/465 615/625 560/570 60/70 350/367 245/293
23/12/2020 470/475 622/632 575/580 60/70 350/367 245/293
22/12/2020 472/476 622/630 570/578 60/70 340/362 250/295
21/12/2020 472/476 622/632 570/580 55/68 340/362 250/295
18/12/2020 472/477 622/630 570/577 55/68 340/362 250/295

 Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
15/01/2020 460/475 630/638 570/577
14/01/2020 460/475 630/638 570/577
13/01/2020 460/470 626/633 565/576
12/01/2020 460/470 626/633 566/576
11/01/2020 460/470 620/630 560/573
08/01/2020 460/470 615/625 555/573
07/01/2020 460/470 615/623 550/570
06/01/2020 460/470 610/623 550/572
05/01/2020 460/470 615/624 550/572
04/01/2020 460/470 615/624 550/572
31/12/2020 460/470 600/626 550/573
30/12/2020 460/470 600/626 550/573
29/12/2020 455/475 600/626 550/573
28/12/2020 455/475 605/628 555/573
25/12/2020 455/475 600/628 550/575
24/12/2020 455/474 600/628 555/575
23/12/2020 460/475 621/632 568/580
22/12/2020 470/475 620/631 568/577
21/12/2020 470/475 620/631 568/577

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
1/15/2021 US DOLLAR 379 379.5 380
1/15/2021 POUNDS STERLING 516.9181 517.6001 518.282
1/15/2021 EURO 459.4996 460.1058 460.712
1/15/2021 SWISS FRANC 426.8499 427.413 427.9761
1/15/2021 YEN 3.6548 3.6596 3.6644
1/15/2021 CFA 0.6839 0.6939 0.7039
1/15/2021 WAUA 545.8708 546.5909 547.3111
1/15/2021 YUAN/RENMINBI 58.531 58.6087 58.6864
1/15/2021 RIYAL 101.0236 101.1568 101.2901
1/15/2021 SOUTH AFRICAN RAND 24.8724 24.9052 24.938

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