Forex

Carney Says U.K. Inflation Slowdown Doesn’t Change Outlook

Published

7 years ago

November 15, 2016

Carney Says U.K. Inflation Slowdown Doesn’t Change Outlook

Mark Carney said the latest unexpected slowing of inflation doesn’t change the outlook that price increases are going to accelerate as the decline in the pound lifts import costs.

“I wouldn’t take a steer from the October numbers,” the BOE governor said after data on Tuesday showed that price gains unexpectedly cooled last month. “Unfortunately inflation is going to go up — that’s the consequence of a very large move in the exchange rate.”

The drop in the inflation rate was driven down by the price of clothing and university tuition fees, but cost pressures built as the falling pound spurred the biggest jump in import prices in five years. Consumer-price growth was 0.9 percent compared with 1 percent in September, the Office for National Statistics said on Tuesday. The rate was forecast by economists to accelerate to 1.1 percent.

The slowdown will prove temporary, economists warned, as separate figures showed the cost of goods leaving factory gates surged 2.1 percent — the fastest annual pace since April 2012. Input prices jumped by 4.6 percent, the biggest monthly gain since records began in 1996. The BOE this month said inflation will go above the 2 percent target next year and stay there until the end of the decade.

The drop in the pound since the Brexit vote in June was both “necessary” and reflects the market’s expectation that the U.K. economy will become less open, Carney told Parliament’s Treasury Committee on Tuesday. He reiterated that BOE policy makers will look through above-goal price gains to support growth and the labor market as the economy adjusts.

“It’s better to take that in a little bit of inflation with more people employed and nominal wages growing a bit more, than doing the opposite and squeezing it out and taking much higher unemployment,” he said. “There are limits, though, to that.”

New Forecasts

The U.K. central bank will update its economic forecasts early next year when it has a better idea of how companies are adjusting to Brexit, Carney said. Companies are making plans but it’s too early to implement them, he said.

Carney also said arguments by politicians that loose monetary policies in the U.K. and elsewhere have widened inequality miss the mark.

“The focus on monetary policy is a massive deflection exercise,” he said. “It’s very important to distinguish the stance of monetary policy and the reasons why global interest rates are low,” he said, adding that “inequality is caused by much more fundamental factors.”

Central banks around the world have been criticized for keeping interest rates at record lows since the global financial crisis, undermining savers, weakening banks and widening pension deficits. U.K. Prime Minister Theresa May told delegates at the Conservative Party conference last month that loose monetary policy had had some “bad side effects” as people with assets got richer while those without have suffered. She said “a change has got to come.”

Neutral Bias

Her comments came after the BOE loosened policy further in August following the shock Brexit vote as they prioritized supporting growth. Earlier this month BOE officials shifted their guidance to say policy could head in either direction next after the weaker pound starting fanning inflation.

“Rates could go up, could go down,” Carney told lawmakers.

A recent survey conducted by Bloomberg from Nov. 4-11, found the median forecast of economists is for the BOE’s main rate to stay at 0.25 percent until at least the first quarter of 2019, just months before Carney is due to stand down as governor.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Forex

Yen Hits 34-Year Low Against Dollar Despite Bank of Japan’s Inaction

Published

12 hours ago

April 26, 2024

Samed Olukoya

The Japanese yen plummeted to a 34-year low against the US dollar, sending shockwaves through global financial markets.

Despite mounting pressure and speculation, the Bank of Japan (BOJ) chose to maintain its key interest rate.

The yen’s relentless slide, extending to 0.7% to 156.66 against the dollar, underscores deep concerns about Japan’s economic stability and the efficacy of its monetary policies.

BOJ Governor Kazuo Ueda’s remarks at a post-meeting news conference did little to assuage fears as he acknowledged the impact of foreign exchange dynamics on inflation but downplayed the yen’s influence on underlying prices.

Investors, already on edge due to the yen’s dismal performance this year, are now bracing for further volatility amid speculation of imminent intervention by Japanese authorities.

The absence of decisive action from the BOJ has heightened uncertainty, with concerns looming over the potential repercussions of a prolonged yen depreciation.

The implications of the yen’s decline extend far beyond Japan’s borders, reverberating across global markets. The currency’s status as the worst-performing among major currencies in the Group of Ten (G-10) underscores its significance in the international financial landscape.

Policymakers have issued repeated warnings against excessive depreciation, signaling a commitment to intervene if necessary to safeguard economic stability.

Finance Minister Shunichi Suzuki reiterated the government’s readiness to respond to foreign exchange fluctuations, emphasizing the need for vigilance in the face of market volatility.

However, the lack of concrete action from Japanese authorities has left investors grappling with uncertainty, unsure of the yen’s trajectory in the days to come.

Market analysts warn of the potential for further downside risk, particularly in light of upcoming economic data releases and the prospect of thin trading volumes due to public holidays in Japan.

The absence of coordinated intervention efforts and a clear policy stance only exacerbates concerns, fueling speculation about the yen’s future trajectory.

The yen’s current predicament evokes memories of past episodes of currency turmoil, prompting comparisons to Japan’s intervention in 2022 when the currency experienced a similar downward spiral.

The prospect of history repeating itself looms large, as market participants weigh the possibility of intervention against the backdrop of an increasingly volatile global economy.

As Japan grapples with the yen’s precipitous decline, the stakes have never been higher for policymakers tasked with restoring stability to the currency markets. With the world watching closely, the fate of the yen hangs in the balance, poised between intervention and inertia in the face of unprecedented challenges.

Naira

Dollar to Naira Black Market Today, April 25th, 2024

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

1 day ago

April 25, 2024

Samed Olukoya

Naira to Dollar Exchange- Investors King Rate - Investors King

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,260 and sell it at N1,250 on Wednesday, April 24th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,300
Selling Rate: N1,290

Naira

Dollar to Naira Black Market Today, April 24th, 2024

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

2 days ago

April 24, 2024

Samed Olukoya

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,250 and sell it at N1,240 on Tuesday, April 23rd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.