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Pound Crashes to Record Low During Asian Session

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Two minutes of chaos in Asian trading sparked a plunge in the pound to a 31-year low, with traders saying the slump was exacerbated by computer-initiated sell orders.

The 6.1 percent decline, the biggest since voters chose to leave the European Union, drove sterling as low as $1.1841, according to composite prices compiled by Bloomberg using contributions from a range of dealers. With the currency already in freefall amid concern about a so-called hard Brexit, Friday’s slide took it the weakest level since March 1985. At least one electronic trading platform recorded a transaction at $1.1378, said traders, who asked not to be identified because they aren’t allowed to speak publicly.

The extent and speed of the drop adds to signs that bouts of extreme volatility are becoming more commonplace in the global currency market as the volume of transactions dwindle and algorithmic traders pick up market share. In January, the South African rand tumbled more than 9 percent in 15 minutes before rebounding, while New Zealand’s dollar had its own flash crash last August.

“In a word, frightening,” Karl Schamotta, director of foreign-exchange research and strategy at Cambridge Global Payments in Toronto, said in an e-mailed response to questions. “Confidence in the currency markets has been badly shaken once again, and any trader who rode tonight’s roller-coaster will certainly question the quality of liquidity going forward.”

The pound pared the drop to trade 1.3 percent weaker at $1.2456 at 6:41 a.m. in London. Traders speculated that the initial decline may have been sparked by human error, or a so-called “fat finger,” with algorithms adding to selling pressure at a time of day where liquidity is low. Others pointed to a Financial Times article citing French President Francois Hollande as saying the U.K. must suffer the consequences of leaving the European Union.

“It would seem that it caught the market wrong-footed and triggered a lot of algorithmic selling,” said Hugh Killen, Westpac Banking Corp.’s head of trading for foreign exchange, fixed income and commodities, in Sydney. “We didn’t see any significant demand for sterling off the low. It was more of the point that the selling subsided and the market calmed and it reverted back to a level that was more realistic for the day.”

One-week implied volatility for the pound against the dollar jumped to as high as 16.77 percent, the highest since July 14, from 10 percent Thursday.

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.

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Naira

Dollar to Naira Today December 9, 2021

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Naira - Investors King

Dollar to Naira exchange rate at the official foreign exchange section and the black market rate as of today December 9, 2021.

Dollar to Naira Official Rate

Naira opened the day at N413.71 to a United States Dollar on Thursday at the official forex market, the Investors and Exporters Forex Window managed by the FMDQ Group.

That was better than the N415.06 it closed against the U.S Dollar on Wednesday. Investors transacted N225.99 million during the trading hours of Wednesday.

While the Naira traded at N444 to a US Dollar at the forex spot market and N453.15 at the forex forward market.

Dollar to Naira Exchange Rate at Black Market

The Naira remained pressured at the parallel market, popularly known as the black market. The Nigerian Naira was sold at N567 and bought at N562 to a United States Dollar on Thursday, December 9th, 2021, according to various bureau de change sources.

Activity at the black market has been blamed for Nigeria’s unstable forex market and multiple exchange rates. The Central Bank of Nigeria does not authorise black market transactions.

Central Bank of Nigeria Exchange Rates

The Central Bank of Nigeria (CBN) official exchange rates as of yesterday are shown below.

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Naira

Exchange Rate: Dollar to Naira Today, Friday 3 December 2021

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nigerian currency - Investors King

The Nigerian Naira remained under pressure across the board despite efforts by the Central Bank of Nigeria (CBN) to prop up the value of the local currency against its global counterparts.

Backed by Nigeria’s foreign reserves, Naira plunged from N306 against the United States Dollar to N414 at the official forex window during the peak of COVID-19 when crude oil dropped to $15 a barrel and eroded Nigeria’s foreign exchange earnings.

Since then, Africa’s largest economy has instituted various forex policies to support the Naira, deepen economic productivity and generally grow activity across key sectors. However, the lack of a stable foreign exchange market has impeded capital importation needed to prop up Naira value as foreign investors continue to stay off the Nigerian market according to the World Bank.

Naira to Dollar Exchange Rate Official Fx Window (FMDQ)

On Thursday, December 2, 2021, the Nigerian Naira opened at N413.94 against the United States Dollar at the Official Forex Window managed by the FMDQ Group.

The local currency sheds 0.06 percent to a greenback by the close of business on Thursday, closing at N414.80 to a United States Dollar.

Analysing the forex spot market, Naira rose to as high as N404 against the American Dollar during the trading house of Thursday before plunging to N444. Trading activity dropped on Thursday as investors traded $139.69 million US dollars, in contrast to $223.8 million transacted on Wednesday.

Naira Black Market Exchange Rates

At the unregulated forex market, the Naira exchanged hoarders and speculators are exchanging the Naira at N558 to United States Dollar.

This was in spite of the CBN efforts at shutting down activity at that section of the forex market given its damages to the nation’s forex market and the fact that Nigerians were almost adopting the black market rate as the official rate.

Experts, including the Vice President, Yemi Osinbajo have blamed the Central Bank of Nigeria for existing of the black market. According to the Vice President, as long as the forex arbitrage exists due to the numerous forex rates, speculators, hoarders and other forex traders will continue to sustain the unregulated black market.

Central Bank of Nigeria’s Official Naira Rates

The CBN quoted rates are the rates the apex bank sells various currencies to Deposit Money Banks (DMBs) in Nigeria. The DMBs are however expected to add between N1 to N2 on each rate to cover costs when selling to customers.

Nigerian Naira (NGX) to Bitcoin (BTC)

Bitcoin, the world’s most dominant cryptocurrency, lost 0.13 percent against the Naira to N23.299 million or $56,833 in the last 24 hours.

Against Ethereum (ether), the second most capitalised cryptocurrency, the Naira gained 0.15 percent to N1.874 million.

GTBank Naira Exchange Rates

As of December 2, 2021, GTBank exchanged the Naira to the US Dollar at N480. While the Euro, the Canadian Dollar and the Great Britain Pound were traded at N549, N366 and N649, respectively since August 20, 2021. See other Naira exchange rates below.

Currency Rate Date
USD ₦ 480 02/12/2021
EUR ₦ 549 20/08/2021
CAD ₦ 366 20/08/2021
GBP ₦ 649 16/08/2021

Access Bank Naira Exchange Rates

Currency Rate Date
USD ₦ 450 17/11/2021
EUR ₦ 531 31/08/2021
GBP ₦ 621 27/08/2021
CAD ₦ 357 18/08/2021
ZAR ₦ 31 18/08/2021
INR ₦ 6 18/08/2021
TRY ₦ 52 18/08/2021
AUD ₦ 299 01/05/2021
RUB ₦ 7.10 01/05/2021
SGD ₦ 268 01/05/2021
AED ₦ 109 26/11/2020
XOF ₦ 800 15/08/2020

Sterling Bank Naira Exchange Rates

Currency Rate Date
USD ₦ 480 18/11/2021
GBP ₦ 619 18/11/2021
EUR ₦ 534 13/09/2021
CAD ₦ 344 20/08/2021

Union Bank Naira Exchange Rates

Currency Rate Date
USD ₦ 414 18/11/2021
EUR ₦ 484 13/10/2021
GBP ₦ 569.3 13/10/2021
CAD ₦ 316 01/05/2021

UBA Naira Exchange Rates

Currency Rate Date
USD ₦ 465 18/11/2021
EUR ₦ 566 31/08/2021
GBP ₦ 622 23/07/2021
CAD ₦ 316 01/05/2021
AED ₦ 119 08/08/2020
INR ₦ 6.06 03/08/2020

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Naira

Naira Sees Stability at Official Window

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Naira - Investors King

The Naira has this week witnessed a steady, unchanged value against the naira as it closed at N415.07 against the dollar on Wednesday (for the fourth straight day), according to the Investors and Exporters window where the Nigerian currency is traded officially.

As mentioned in a previous article, the Naira appears to have found a resting place for its value heading into the festive period. Even though the Naira is now stable, the value may still be too negative for the Nigerian economy, as food prices and prices for other goods keep going on the rise.

The FMDQ group through its website gives updates concerning the currency’s daily trading (opening and closing prices). It also gives updates on the Spot rate and Forward rate; the prices at which the currency trades for transactions throughout that day as well as future transactions which were agreed on that day.

The Spot rate maintained its usual highest value of N404 per dollar, but its lowest value fell as far as N457.02 per dollar. This is considerably lower than the N444 per dollar which it usually attains.

The Forward rate has however seen changes in value, dropping to a high of only N445.97 per dollar, maintaining its lowest price of N457 per dollar.

The FMDQ group also reports the total turnover of the currency in a day, i.e. the total amount of the currency that was traded throughout that day. On Wednesday, it was revealed that the total amount of the dollar that was traded sat at $223.8 million at the close of the day. This is higher than the $152 million which was recorded the previous day.

At the parallel market (which is not recognized by the Central Bank of Nigeria), the Naira was sold at a price of N558 per dollar as it looks to maintain the recovery which it made after hitting an all time low of N575 per dollar in September.

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