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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.

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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