Forex

Euro Slips With Stock, After Renzi Resigns

Published

8 years ago

December 5, 2016

Euro Slips With Stock, After Renzi Resigns

The euro slumped with stock index futures and Italy’s bonds amid concern that nation’s vote against constitutional reform will embolden nationalist movements.

The common European currency touched its weakest point in 20 months and notes in Spain and Portugal also dropped. Prime Minister Matteo Renzi quit after losing a referendum he’d called to rein in the senate’s power. Asian shares fell, while government debt tracked a rebound in Treasuries from Friday, when mixed U.S. jobs data weighed on equities. Oil declined on signs producers outside of OPEC will boost output.

The defeat of Renzi’s reforms, aimed at simplifying the legislative process in a nation that’s seen 63 governments since the end of World War II, follows Britain’s shock vote to exit the European Union and Donald Trump’s unexpected victory. The euro’s losses were limited as Austrians spurned the appeal of an anti-immigration nationalist to elect a Green Party-backed economics professor as their next president.

“The first reaction to Renzi resigning is euro selling, but the more important event is parliament’s dissolution and the general election in Italy,” said Daisuke Karakama, chief market economist in Tokyo for Mizuho Bank Ltd. “Elections in the Netherlands, France, Germany and Italy next year will keep the euro pressured. The euro could reach $1.02 in January-March period. ”

Currencies

The euro weakened 0.5 percent to $1.0611 as of 7:37 a.m. in London, paring a slump of as much as 1.5 percent from earlier in the session. Polls show an early election in Italy would see the anti-euro Five Star Movement swept into power. The Polish zloty lost 0.7 percent, the Danish krone slid 0.5 percent and the Japanese yen weakened 0.3 percent.
The pound declined 0.2 percent. Divisions within the government were exposed as Foreign Secretary Boris Johnson declined to endorse the proposal of some colleagues that Britain consider paying the European Union for continued access to its markets after Brexit.
The offshore yuan lost 0.1 percent as Chinese shares declined. The U.S. president-elect rejected criticism of his decision to take a phone call from Taiwan’s president and reiterated concerns over China’s currency and trade policies to his 16.6 million Twitter followers.
The kiwi weakened 0.5 percent to 71.05 U.S. cents as New Zealand Prime Minister John Key, a former currency trader, said he’ll stand down and backed Finance Minister Bill English to succeed him.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, jumped 0.4 percent following its first weekly retreat since Trump’s victory. The greenback has climbed on speculation he will stoke growth with fiscal stimulus.
U.S. employers added 178,000 workers to payrolls last month, after rising by a revised 142,000 people in October, and the jobless rate slid to a nine-year low. Hourly wages declined for the first time since the end of 2014, data out Friday showed.

Bonds

The yield on Italian notes maturing in a decade surged 10 basis points to 2.00 percent, while that on similar Spanish notes rose four basis points to 1.58 percent. The yield on the benchmark 10-year German bund rose two basis points to 0.30 percent.
Yields on Australian government debt due in a decade slid seven basis points to 2.79 percent, similar maturity New Zealand notes yielded 3.19 percent, down five basis points, as rates on Chinese bonds dropped three basis points to 3.02 percent.
Ten-year U.S. Treasury yields fell one basis point to 2.37 percent after shedding seven basis points on Friday.

Stocks

Euro Stoxx 50 index futures slumped 0.7 percent, while those on the FTSE 100 Index dropped 0.5 percent.
The MSCI Asia Pacific Index declined 0.6 percent, with Japan’s Topix index retreating 0.8 percent, Australia’s S&P/ASX 200 Index down 0.8 percent, the Kospi losing 0.4 percent in Seoul and New Zealand’s S&P/NZX 50 Index dropping 0.7 percent.
The Shanghai Composite Index and the Hang Seng China Enterprises Index both lost 1.2 percent.
Futures on the S&P 500 Index were little changed, after the underlying benchmark ended Friday up less than 0.1 percent.

Commodities

West Texas Intermediate crude fell 0.8 percent to $51.27 a barrel, following its best week since 2011, as U.S. producers boosted the number of rigs drilling for crude to the most since January after OPEC approved its first supply cut in eight years.
Copper for three-month delivery rallied 1.4 percent, while zinc gained 2.2 percent and Nickel rallied 1 percent. Gold swung between gains and losses, after falling 0.5 percent last week, its fourth straight weekly loss.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Forex

BDC Operators Blame Forex Shortage for Continued Naira Depreciation

Published

3 hours ago

October 5, 2024

Ugwoke Ogbodo

Bureau Of Engraving And Printing Prints New Anti-Counterfeit 100 Dollar Bills

Bureau De Change (BDC) operators in Nigeria have said that the value of Naira has continued to depreciate in the parallel market because of the scarcity of forex in the sector as major sources become drastically reduced.

This was disclosed by the Chairman of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe.

Gwadabe said sources of forex to that segment of the forex market have been severely impacted by the recent policies of the Central Bank of Nigeria.

He averred that members of the Association no longer get as much forex from relevant sources such as exports and external remittances and now rely on irregular intervention from the apex bank.

Blaming the International Money Transfer Operators (IMTOs), Gwadabe said the liberalisation of the market has prevented supply inflow which is being reduced and has made it difficult for BDCs.

According to him, IMT0s have ambushed the international remittance payment as most remittance payment now go their direction.

He added that non-oil exports, which is another source of FX for BDCs have also been reduced and the CBN intervention is not regular.

In the past, he noted that BDCs used to do up to $40k weekly but now, it is not more than $20k.

Gwadabe declared that the Naira will continue to depreciate in the parallel market except there is regular intervention by the CBN.

Describing the BDCs as the language of the invisible players in the retail end of the market, he stated that any sentiment of scarcity by buyers as well as sellers would affect the value of the Naira.

Recall that the Naira fell to N1,700/$ in the parallel market in September, its lowest in seven months but recovered marginally on the 2nd of October. However, the official market section saw a wide depreciation of up to 8%.

The CBN in the past one year has sought to regulate the IMTOs and enable them to play a more prominent role in attracting foreign exchange into official channels from international sources.

In 2023, Nigeria received around $19.5 billion- around 35% of total remittances to Africa according to the World Bank.

However, Taiwo Oyedele, the Chairman of the Presidential Committee on fiscal policy and tax reforms stated that only about 10% of the nearly $20 billion remittance entered the official forex exchange market as the parallel market swallowed up almost 90% of remittance inflows.

Naira

Naira Strengthens Against Dollar at Official, Black Market in Final Session

Published

4 hours ago

October 5, 2024

Iyanuoluwa Martins

Naira to Dollar Exchange- Investors King Rate - Investors King

The Naira continued to strong-arm the US Dollar as it made a 1.7 percent gain in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, October 4 as the local currency gained a value of N28.05 to close the closing session at N1,631.21/$1 at the official window.

According to data obtained from the FMDQ Securities Exchange, compared to N1,659.26/$1 published in the preceding session on Thursday.

Turnover published on the FMDQ Group website stood at $239.36 million indicating that the session’s turnover slid by 46.9 percent, indicating that there was a decrease of $211.03 million compared to $450.39 million published the previous day.

Equally, the domestic currency also witnessed gains against the British currency and the Euro in the week’s final session.

On the Pound Sterling, the local currency made an appreciation of N24.21 to wrap the session at N2,175.44/£1 from N2,199.65/£1 that it sold at the previous session.

Also, against the Euro, the Nigerian currency closed at N1,830.11/€1 versus N1,830.89/€1, indicating a 78 Kobo appreciation.

In the black market, the Naira also gained on the American currency by N5.23 to close at N1,676.56 per Dollar from N1,681.79.

It also made the same movement against the British Pound as it rose by N17.10 to N2,153.83 against N2,170.93 and trading against the Euro, the local currency added N6.93 to N1,852.10 versus N1,859.03.

It equally recorded a positive end result against the Canadian Dollar as it gained N10.52 to end the last session at N1,202.18 from Wednesday’s N1,212.72.

Naira

Naira Gains on Dollar at Official Market on Improved Supply, Dips at Black Market

Published

1 day ago

October 4, 2024

Iyanuoluwa Martins

The Naira appreciated against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, October 3, as the local currency sold for N1,659.26/$1.

The domestic currency recorded a 0.6 percent or N9.89 again against the greenback compared to the N1,669.15/$1 it was valued at the previous session on Wednesday.

This occurred as turnover published on the FMDQ Group website stood at $450.39 million indicating that the session’s turnover surged by 155.3 percent, indicating that there was an increase of $273.94 million compared to $176.45 million that was published the day before.

This development indicates that the Central Bank of Nigeria (CBN) may have made fresh interventions in the market after it only sold to Bureau de Change (BDC) operators in recent weeks.

Meanwhile, the domestic currency also witnessed losses against the British Pound Sterling and the Euro in the week’s penultimate session.

On the Pound Sterling, the local currency made a loss of N56.00 to wrap the session at N2,199.65/£1 from N2,143.65/£1 that it sold at the previous session and against the Euro, the Nigerian currency closed at N1,830.89/€1 versus N1,789.71/€1, indicating an N41.18 depreciation.

In the black market, the Naira plunged by N25.75 to close at N1,681.79 per Dollar from N1,656.04 and extended this outcome against the British Pound as it fell by N12.70 to N2,170.93 against N2,158.23.

Trading against the Euro, the local currency dropped N14.80 to N1,859.03 versus N1,844.23

However, it was a positive outcome against the Canadian Dollar as it gained N7.28 to end the penultimate session at N1,212.72 from Wednesday’s N1,220.00.