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Forex

Forex Weekly Outlook September 26-30

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The US Federal Reserve on Wednesday left interest rate unchanged, even though the Federal Open Market Committee argued that the case for rate hike has strengthened, they agreed that further evidence of continued growth is needed to validate current economic progress. Also, the committee lowered its expectations for both inflation and economic growth this year, citing weak business fixed income and international developments (Brexit and slowdown in China) while hoping that “as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further” the 2 percent inflation target would be achieved.

However, housing starts declined by 5.8 percent to 1.14 million units in August, while building permits fell 0.4 percent to 1.14 million-unit rate. Even though, unemployment claims improved by 8,000 to 252,000 last week, the disparity in the data continued to create a mixed picture of the American economy. Particularly, when the drop in consumer spending that has been supporting the economy is factored-in. Hence, investors will look to seek clarity on future monetary policy when Fed Chair Janet Yellen and Federal Reserve Bank of St. Louis President James Bullard speaks on Wednesday.

Also, the data for durable goods, new home sales, consumer confidence and final GDP that are due this week are other key economic data needed to decipher the economic direction going forward.

In Japan, the Bank of Japan left interest rate unchanged, but took a different turn when it introduced “yield curve control”, a policy that was formulated to keep the 10-year Japanese government bond yield at zero percent from the usual negative yield (a situation where bond buyers pay to lend Japanese government money) to steepen the difference between the yields of short-term bonds (which are negative in Japan) and long-term bonds.

While some analysts have said the whole policy is a sign that the Haruhiko Kuroda led team is running out of policy options, it was implemented in an effort to increase banking activity and subsequently boost their profitability through wider spread in rates to arbitrage profits. This is because an increase in banking activity means greater economic activity and higher consumer prices, but because the detail of the yield curve control was vague it is hard to succinctly tell to what degree the BOJ planned to steepen the yield curve or if the apex bank will expand its stimulus.

Nevertheless, the industrial production declined by 0.3 percent from 0.0 percent recorded previously. This signaled that the world’s third largest economy is still struggling with weak exports due to the continuous gain of the Japanese yen that has sapped profits of manufacturing companies.

In Canada, the economy is not just running at a 10-month low inflation rate (0.2%) but also weak retail sales (-0.1%) as consumers are not spending even after the federal government revamped its child benefit plan and distributed cheques in July. The same month, the consumer spending dipped against a widely forecast increase in retail sales, this was after the economy recorded its worst contraction since 2009.  If global oil gut continued to weigh on growth, it is likely that the Bank of Canada will cut rates to stimulate the economy, maybe not in October meeting but in the fourth quarter if no improvement in key indicators.

Overall, the Bank of Japan will need the Federal Reserve to raise rates in order to halt the yen gains and boost its exports. However, the financial markets remained vague and highly speculative as central banks (US, Japan, Australia, New Zealand, Nigeria and South Africa) refrain from excessive stimulus, but without clear cut monetary policy. This week, NZDJPY and NZDUSD top my list.

NZDJPY

After the New Zealand’s second quarter GDP expanded at 0.9 percent three weeks ago, which was less than the 1.1 percent expected by economists. The New Zealand dollar has continued to slide against the Japanese yen, this I expect to boost the NZDJPY sell-off this week as Japanese yen continued to strengthen after the BOJ refused to expand its monetary policy.

nzdjpyweekly

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Technically, this pair has been selling for the past three weeks and lost 309 pips in total. This week, as long as 73.90 resistance holds I am bearish on NZDJPY with 72.34 as the first target and 69.94 as the second target.

NZDUSD

Although, various US data due this week could damp this pair outlook. I still believed that the US dollar is attractive enough to extend its gains against the New Zealand dollar. Nevertheless, it is advisable to monitor those data and FOMC speakers this week.

nzdusdweekly

Click to enlarge

This pair peaked at 0.7484 three weeks ago, but since then it has lost 241 pips and closed as a bearish pin bar last week. This week, as long as 0.7362 resistance holds, I am bearish on this pair with 0.6989 as the 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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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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