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Forex Weekly Outlook October 10-14

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Forex Weekly Outlook October 10-14
  • Forex Weekly Outlook October 10-14

The US macro data showed remarkable improvement last week, with economic activity in the services sector rising as high as 57.1 in September, the highest in almost a year. While unemployment claims improved by 5,000 to 249,000 — the lowest since April, and 83 consecutive weeks that unemployment benefits will be below 300,000.

Although, labor market added fewer jobs (156,000) than expected in September, the economy continued to grow on so many levels. For instance, the drop in jobs created in the private sector in September was because the US economy is nearing full employment, hence, job growth is expected to slow. Two, the increase in Trade deficit is also as a result of the surge in imports of capital goods and record purchases of services, fees to broadcast the Olympic Games from oversea, which outweigh exports. This should normalize now that the Olympic Games has ended and the manufacturing sector (51.5) has picked up. Likewise, the increase in the unemployment rate to 5 percent from 4.9 percent recorded in August was due to surge in participation rate.

Again, average hourly earnings rose 0.2 percent to 2.6 percent on a yearly basis, indicating that employers are hesitant to fire workers amid a tightening labor market. These are the reasons I think the Friday dip in the US dollar against all the major currencies is temporary, and I expect the greenback to rebound this week as investors digest the data.

In the UK, the pound plunged to 1.1991 against the US dollar on Friday, after the Prime Minister Theresa May comments on the needs for the U.K. to trigger article 50 of the Lisbon Treaty as soon as March 2017, and shun request from financial institutions to consider them in the Brexit agreement as they claimed Brexit could cost banks about £40 billion in revenue and wipe-off as much as 70,000 jobs from the U.K. with about £10 billion in tax revenue.

While, the U.K. business sentiment is presently on the downside, the construction sector (52.3) rebounded in September as companies return to growth, and activities in the manufacturing sector (55.4) and non-manufacturing sector (52.6) picked up, but industrial output (0.2%) expanded below 0.4 percent predicted. Yet, the highest increase since Brexit. Again, the drop in the Pound is expected to further boost exports and tourist patronage while prices of imported goods will surge (bolstering inflation).

However, if Prime Minister Theresa May failed to curb her approach to Brexit, and the European leaders, Angela Merkel and Francois Hollande, continued to insist on no special access to European single market, things could worsen henceforth as European businesses in the UK scramble for safety by moving overseas to cut costs and sustain profitability in the advent of an increase in taxes.

In Japan, the yen halted its 8-day decline against the US dollar on Friday, following a 3.3 percent drop in its value since September 28. Even though, the manufacturing sector expanded 50.4, an increase of 0.1 above preceding month, it is uncertain if the Bank of Japan (BOJ) effort to boost its manufacturing sector and pressure consumer prices by steepen its yield curve has started materializing. Nevertheless, the increase in the odds of the Fed raising rates in December is aiding BOJ monetary stance, however, the BOJ needs to expand its stimulus to sustain the current decline.

Next week, investors will look to deduce Wednesday’s minutes of the Federal Reserve’s September policy meeting and retail sales for possible clues on the next interest rate hike. This week, the EURUSD, AUDUSD and last week NZDUSD top my list.

EURUSD

The US dollar plunged on Friday against the Euro-single currency, following weaker than expected nonfarm payrolls report. While the job report was below expectation, the US economy continued to recover and create more jobs. For the past seven weeks, this pair has failed to break and sustain 1.1233 resistance. Also, considering Euro-area uncertainties post-Brexit and the dollar renewed strength as the odds of the Federal Reserve raising rates in December increase, this pair will likely drop further this week.

Forex Weekly Outlook October 10-14

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Technically, since the dark cloud cover pattern was formed 7-weeks ago below the ascending channel started since November 2015. This pair has confirmed its bearish stance, but the surge in global risks and uncertainty has impacted the volume of trade as investors are risk averse. This week, as long as price remains below 1.1233 I am bearish on EURUSD with 1.1019 as the first target. A sustained break should open up 1.0821 support as the second target.

AUDUSD

Even though, Australia’s consumer spending surged 0.4 percent in August and building approvals was better than expected. The Aussie dollar declined against the US dollar, indicating that the market is gradually favouring lower Aussie dollar ahead of the Fed rate decision. Likewise, the Reserve Bank of Australia has repeatedly said higher foreign exchange rate will damp its current progress – especially its low inflation.

Forex Weekly Outlook October 10-14

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This week, as long as price remains below 0.7673 resistance, I am bearish on this pair with 0.7505 as the first target and 0.7379 as the second target. Click August 22-26 weekly outlook for a more detail explanation on the Aussie dollar.

Last week Recap

NZDUSD

This week, I remain bearish on this pair as explained last week here.

Forex Weekly Outlook October 10-14

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While, I will be standing aside on EURAUD this week, after gaining 131 pips before it retreated. This is to assess the Euro-area economic outlook going forward.

 

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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