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Forex Weekly Outlook December 12-16

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Euro currency
  • Forex Weekly Outlook December 12-16

As the world awaits the Federal Reserve rate decision this week, the U.S economy continued to churn out positive economic data amid Trump’s proposed fiscal spending in 2017. The services sector expanded (57.2) the most in over a year in November, while the US factory orders rose 2.7 percent in October, the highest in 1-1/2 years. Also, a gauge of confidence in the economy showed that consumers’ sentiment surged 4.5 percent in December to 98 percent, a little below 2015 high, which was the highest since 2004. These data confirmed the resurgence in the U.S economy and validated manufacturing sector recovery as investors continue to increase their stocks holding ahead of Trump presidency.

Although, experts have said uncertainty surrounding incoming administration’s policy in early 2017 will fuel market volatility as businesses and investors continue to position for business tax cuts and an aggressive fiscal stimulus package. However, the possibility of rate increase having substantial impacts this week is minimal, this is because the financial market as a whole has shifted focus to a series of policies president-elect planned to implement as he attempt to stimulate the economy through aggressive fiscal spending and job creation in January.

Again, this week the Federal Reserve is expected to increase rates by 25 basis points to 0.75 percent on Wednesday. Also, retail sales, producers’ price index, building permits and inflation rate data are due this week.

In the Euro-area, the European Central Bank (ECB) president, Mario Draghi, last week announced the extension of asset buying program that was scheduled to end in March 2017 to December 2017. According to the president, an adjusted quantitative easing program will begins on April 2017 at €60 billion a month up till December 2017. Down from the on-going €80 billion asset-purchasing program.

While the Euro-area economic outlook remains vague with a low inflation rate and weak manufacturing sector, the president forecast an accelerated inflation rate of 1.7 percent in 2019 from present 0.2 percent. This decision prompted investors to doubt the region monetary space to react to possible uncertainty in-case incoming economic data digress from projection.

Again, the statement that purchases would continue beyond 2017 if the institution deem it fit to lift inflation back towards its target per adventure this extension failed to materialize, further cast doubt on the economic stability of the region and encourage sell-off of the Euro currency against its counterparts last week. Especially with the Federal Reserve likely to raise interest rates this week, the market is anticipating possible parity of the EURUSD pair.

In Australia, the economy contracted 0.5 percent, after data showed slow growth amid subdued investment outlook and low inflation rate in the third quarter. The Reserve Bank of Australia Governor attributed the negative growth rate to temporary swing, therefore, leaving the cash rate at a record low of 1.5 percent on Tuesday. This week, I will be looking to trade EURCAD and AUDUSD.

EURCAD

This pair has lost about 1370 pips within 5 weeks and closed below 1.4070 support level established since November 2015, after the ECB extends its quantitative easing program last week. While, the Canadian dollar on the other hand has recovered from previous lows, following a successful production cut by both OPEC and non-OPEC. Again, economic data from Canada showed the economy has bounced back from Alberta wild fire with the manufacturing sector gradually improving.  Also, the Euro-area is currently going through political uncertainty – France and Italy election, Greece financial woes and Brexit. Hence, the reason I sold this pair on Wednesday last week, but this week I am maintaining my bearish outlook on this pair as long as 1.4070 resistance holds, with 1.3742 as the target. I believe once the market digests the news of OPEC and non-OPEC reaching consensus over the weekend that the Canadian dollar will get a boost.

Forex Weekly Outlook December 12-16

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AUDUSD

This pair failed twice to breach 0.7505 resistance in the past two weeks, and further weighed upon by the 0.5 percent negative growth rate recorded by the Australian economy in the third quarter of the year, the first time in 25 years. Although, the Reserve Bank of Australia Governor Philip Lowe said it was a temporary swing, but few experts have questioned the economic stability of the Aussie and call for more a proactive approach. Whereas, the US dollar is likely to get a boost from the Federal Reserve this week.

Forex Weekly Outlook December 12-16

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Again, at 74 cents to a US dollar, Aussie dollar is a little overpriced. This week, I will be looking to sell this pair as long as 0.7505 hold for 0.7379 first target and 0.7203 as the second target.

Last week Recap

EURGBP

This week, I remain bearish on EURGBP as long as 0.8471 holds and will be targeting 0.8240 support as discussed last week, a sustained break of that should open up 0.8117 level.

Forex Weekly Outlook December 12-16

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NZDCAD

This pair topped our list last week, but fell short of our target. This week, as long as 0.9505 resistance is intact I am bearish on this pair with 0.9298 as the target.

Forex Weekly Outlook December 12-16

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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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Forex

Banks CEOs Declare Readiness, Assured No Hidden Charges In Forex Sale

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Naira Dollar Exchange Rate - Investors King

Chief executives of banks have assured no hidden charges in the sale of foreign exchange as they declared their readiness to meet the demands of Forex in the country.

The CEOs under the aegis of the Committee of Chief Executives of Banks at a virtual parley with the media also said they are not interested in procuring bureau de change licenses to dispense the new responsibility thrust on them by the central bank of Nigeria (CBN)

At a media briefing chaired by the chairman, and the managing director of Access Bank, Herbert Wigwe, other CEOs in attendance include Segun Agbaje of GTCO, Yemisi Edun of FCMG amongst others.

The briefing was in reaction to the CBN circular with Ref No: BSD/DIR/PUB/LAB/14/052 which gave a directive to Deposit Money Banks (DMBs) to set up teller points at designated branches and sell Foreign Exchange customers in need.

The directive in the circular signed by Haruna Mustafa, Director, Bank Supervision Department, was a follow up to the stoppage by the CBN, of the sale of forex to the Bureau De Change (BDC) operators in the country.

With this development, banks are now to attend to legitimate FX requests for Personal Travel Allowance, Business Travel Allowance, tuition fees, medical payments and SMEs transactions, among others.

The regulator also disclosed that a toll-free line had been set up at the CBN for bank customers to escalate unresolved complaints related to their FX requests.

Speaking at the media briefing, Herbert Wigwe assured of the readiness of the banks to meet the demands of the customers without any additional costs, noting that they have more capacity than the BDCs

“Banks have broader network than the previous sources and if you look at the branch network of all the banks in the country, I am not sure that the alternatives have resources like banks to provide this service to everybody”.

He allayed the fear of hidden charges said the transaction comes at no additional cost to the customers.

“There is no one-cent additional charge. It is unfortunate that bankers always come under pressure every time because of accusations of hidden charges. There is no additional charge in this service,” he stated.

Segun Agbaje, the group managing director of GTCO, promised that the banks will provide several channels for the customers to get their supply for their needs as he assured of the readiness of the banking system.

“They can start to come from today. We are ready to fund their demands”. stating that different banks have different strategies to ensure there are no hitches.

He stated that the control is centralised in each bank while the service is decentralised so as to be able to cater to many at the same time.

“We will run a transparent system and the compliance will be very strict because there will be sanctions. Anyone that refuses to comply with the rules will be sanctioned by the regulator and the law enforcement agencies” as he warned those that could want to come with fake documentation or passport to beat the process.

In her contribution, Yemisi Edun of FCMB assured that customers will have the same experience across the board irrespective of the bank as she allayed that the services may be poor in some banks.

“We have done this with remittance where we dedicate desks to attend to customers and customers will be directed to the desks once they have proper documentation.

In conclusion, Wigwe stated that apart from the injection that could be coming from the CBN, the banks also have their sources for foreign exchange which include from International Monetary Transfer Organisation, Diaspora remittances, and others from where they can meet the customer’s demands.

“We are putting structure and infrastructure in place to meet the demands of the customers but they should come with proper documentation” Wigwe stated

The apex bank expects the DMBs to adequately publicize the locations of the designated branches and make necessary arrangements to sell FX to customers in cash and/or electronically in compliance with extant regulations,

While CBN said the banks should ensure that no customer was turned back or refused FX provided that documentation and all other requirements are satisfied, it also outlaws undue delays, rationing and/or diversion of FX while it compels DMBs to establish electronic application and alert systems to update customers on the status of their FX requests, the circular added.

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Forex

BDCs Continues To Provide Forex Services After CBN Halts Sales Of Forex To Operators

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naira

The recent announcement by the Central Bank of Nigeria (CBN) suspending dollar sales to Bureau de Change Operators would not stop the forex retailers from conducting their services in line with their operating licenses and guidelines.

According to a statement by the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, BDCs will continue to provide foreign exchange services to the public.

“BDCs are licensed to provide retail FX services, including buying from the public and also selling to end-users for allowable transactions namely Personal Travel Allowance (PTA), Business Travel Allowance (BTA), payment of medical and school fees,” Gwadabe said.

He added that while the dollar sale from CBN had helped in enhancing supply, the fact remains that BDCs are empowered to source FX from other sources and also to provide various services to members of the public.

“While the CBN has stopped dollar sale to BDCs, it has not canceled their operating licenses, or banned them from providing FX services to members of the public”, he added.

“At ABCON, we urge our members to see the CBN pronouncement as a wake-up call and opportunity to widen their customer base and deepen their business.

“ABCON has always worked with the CBN to ensure proper working of the FX market and in line with this principle, we will engage with the apex bank to address and resolve all the issues that led to the recent action, including identification and sanctioning of earring BDCs, where necessary.

“In addition to this, and in view of the fact that BDCs have been very effective in ensuring stable exchange rate, ABCON will work with relevant stakeholders including law enforcement agencies to develop a National BDC Policy with the aim of enhancing the contribution of the BDC subsector to the nation’s economy”, he said.

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Naira

Naira Exchange Rates Today, Friday, July 30, 2021

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BDC Operators - Investors King

Naira gained N5 against the United States Dollar on Friday morning to N515 at the parallel market popularly known as the black market.

Against the British Pound, the local currency dropped N2 from N710 recorded on Wednesday to N712 on Friday, while against the European it remained at N597, the same rate it traded in the last three days.

The Naira plunged against its global counterparts after the Central bank of Nigeria accused Bureau De Change Operators (BDCs) of illicit money flows and market manipulations that over time have sustained the unregulated black market section of forex.

Operators at the bureau de change section of forex had been accused of being the main source of forex for speculators and hoarders that manipulate forex rates at the unregulated black market, this the CBN plans to curb by cutting its weekly forex supply to BDCs but focus on servicing the economy through the banks.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
30/07/2021 508/515 705/712 590/597 70/75 410/420 305/330
29/07/2021 512/520 705/715 590/600 70/75 410/420 300/325
28/07/2021 515/525 700/710 590/600 63/70 410/420 300/320
27/07/2021 500/505 695/703 585/592 62/69 407/415 300/320
26/07/2021 500/504 695/703 585/592 62/69 407/415 300/320
23/07/2021 500/504 698/705 588/595 62/69 407/415 300/320
22/07/2021 498/503 695/703 585/590 62/69 407/415 300/320
19/07/2021 495/503 698/705 585/592 62/69 407/415 300/320
16/07/2021 502/506 700/708 590/596 62/69 407/415 300/315
15/07/2021 500/505 700/708 590/596 62/69 407/415 300/320
14/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
13/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
12/07/2021 500/505 700/708 590/595 62/69 407/415 300/320
09/07/2021 500/505 700/708 588/593 62/69 407/417 300/320
08/07/2021 499/503 700/708 588/593 62/69 407/417 300/325
07/07/2021 499/503 700/710 588/593 62/69 407/417 300/325
06/07/2021 499/503 698/710 590/595 62/69 407/417 300/325

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
30/07/2021 500/515 705/715 590/603
29/07/2021 510/525 705/715 590/602
28/07/2021 510/520 695/706 585/600
27/07/2021 490/500 690/700 580/595
26/07/2021 490/500 694/705 580/595
23/07/2021 490/500 694/705 580/595
22/07/2021 490/500 690/705 580/595
19/07/2021 490/500 690/707 580/595
16/07/2021 490/500 700/710 585/600
15/07/2021 490/500 698/710 585/600
14/07/2021 490/500 698/710 590/595
13/07/2021 490/500 697/710 585/600
12/07/2021 490/500 698/710 585/600
09/07/2021 490/500 698/710 585/600
08/07/2021 490/500 697/710 585/600
07/07/2021 490/500 697/710 585/600
06/07/2021 490/500 697/710 585/600
05/07/2021 490/500 700/714 585/600

Central Bank of Nigeria’s Official Naira Rates

N.B: These tables are updated three times a day.

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