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Forex Weekly Outlook December 19-23

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pound-sterling
  • Forex Weekly Outlook December 19-23

Last week, the Federal Open Market Committee raised rates for this first time in a year, and the second time in a decade. The federal funds rate was raised by 25 basis points from 0.50 percent to 0.75 percent as the Federal Reserve was certain the economy is healthy and on the path to full recovery, after data from the labor market showed continued growth and sustained economic expansion at a 3.2 percent rate in the third quarter of the year.

While the slowdown in consumer spending in November has been attributed to the uncertainty surrounding the presidential election, the inflation rate pointed to a steady build-up in price pressures and predicted to support further rate hike in 2017.

Also, the committee projection of inflation rate rising to 2 percent in the first half of 2017 as lower oil prices fade and cost of import goods increases — will further boost the prospect for business investment in the US in 2017 through 2018. Again, most experts believe that the Trump economic plan will speed up economic growth and create more jobs, even though global uncertainty is expected to increase as the euro-area strive to strike a balance amid Brexit and political uncertainty.

In the UK, the Bank of England Governor Mark Carney left interest rates at a record-low of 0.25 percent, citing the persistent increase in prices of gasoline. This increase boosted inflation rate in October to 1.2 percent, the fastest in two years. Also, since the referendum, import prices continue to rise and surged 15 percent in November to its highest in 5 years, and expected by the apex bank to increase even more as the embattled nation seek to trigger article 50 of the Lisbon treaty in March 2017.

Accordingly, businesses are not creating new jobs, but merely sustaining current positions, hence, the reason unemployment rate remains 4.8 percent and employment plunged by 6,000 in the third quarter, suggesting that businesses are wary of socio-political situation in the UK and its region as the nation face its toughest test in years.

However, retail sales surged 0.2 percent in November, following a series of discount offered on Black Friday. This is projected to continue through December when household spending is usually higher.

In Australia, the unemployment rate rose to 5.7 percent in November, even though 39,300 jobs were created over the month. This was after data showed the economy contracted by 0.5 percent in the third quarter for the first time in years, while some experts have said it’s a one-off thing, the overall Australian economic outlook remains shaky ahead of 2017.

Overall, the US economy remains strong and expected to sustain current improvement in the medium term. However, global developments will play a pivotal role in determining the economic direction and how businesses approach it going forward. This week, as we round up the year, NZDUSD and EURGBP top my list.

NZDUSD

I first mentioned this pair sell-potential in May, ever since I have written extensively on the New Zealand economy in relation to the US dollar. However, Last week this pair closed for the first time in 5 months below 0.6989 support level that was first established in July. But this is significant because the price closed below the ascending channel drawn since May when the US dollar was weaker.

Forex Weekly Outlook December 19-23

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Economically, the FOMC statement released last week has bolstered the US dollar economic outlook against emerging currencies. This new US dollar attractiveness is likely to continue into 2017 and it is expected to extend current gain against the New Zealand dollar.

So this week, I will be looking to sell NZDUSD below 0.6989 price levels for 0.6771 support as the first target and a sustained break should open up 0.6580.

EURGBP

This pair topped our list three weeks ago, but closed mid-way to our 0.8240 targets last week. Confirming the importance of bearish pin bar of three weeks ago.

Forex Weekly Outlook December 19-23

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While the euro-area is yet to find a permanent solution to its socioeconomic issues, the UK is positive of retaining preferential access to the European Union 500 million consumer market after Brexit.

This coupled with strong consumer spending, low unemployment rate and moderate earnings continue to support the pound sterling over the euro currency for the past 7 weeks. This week, I will be looking to sell this pair below 0.8471 resistance level for 0.8240 targets, a sustained break should open up 0.8117 support as the second target.

Last Week Recap

AUDUSD

Last week, our first target hit at 0.7379, but the pair closed below July low giving a total of 209 pips. This week, I will be looking to capitalize on dollar current attractiveness to sell this pair below 0.7379 for my May 0.7203 projection for Aussie.

Forex Weekly Outlook December 19-23

Click to enlarge

NZDCAD

Three weeks ago, I first mentioned the sell opportunity of NZDCAD pair and since then this pair has dropped 207 pips to close below our 0.9298 targets. This week, if the 0.9298 break is sustained I will look to sell this pair for 0.9141 support.

Forex Weekly Outlook December 19-23

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This is our last Forex Weekly Outlook for 2016. The 2017 global currency outlook will be out in Two weeks.

We wish you all a Merry Christmas and Happy New Year in Advance.

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.

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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Naira

Naira Drops to N394.67 Against US Dollar on I&E FX Window

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Naira Dollar Exchange Rate

Naira Drops to N394.67 Against US Dollar on I&E FX Window

Economic uncertainties amid the rising number of COVID-19 continues to weigh on the Nigerian Naira across key foreign exchange markets.

The Nigerian Naira depreciated against the United States Dollar on the Investors and Exporters (I&E) Foreign Exchange Window on Thursday.

The local currency depreciated by 0.34 percent to N394.67 per US Dollar, down from N392.69 it opened the day.

On Thursday, investors exchanged $215.63 million on the I&E window.

Despite efforts to ease forex scarcity with $20 billion diaspora remittance, the Naira continued to fall against global counterparts due to weak remittance inflows from developed nations.

Like other nationalities, Nigerians in the diaspora are struggling with lockdowns, surged in the unemployment rate and the drop in global earnings.

Also, weak foreign reserves amid rising debt servicing and other expenditures are hurting the central bank’s ability to intervene effectively across the foreign exchange markets as usual.

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Forex

Stanbic IBTC Shut Down Bureau De Change Business

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stanbic IBTC Insurance

Stanbic IBTC Shut Down Bureau De Change Business

Stanbic IBTC Holdings Plc has shut down its bureau de change subsidiary, Stanbic IBTC Bureau De Change Limited (Stanbic IBTC BDC) due to the change in foreign exchange inflow policy.

It should be recalled that the Central Bank of Nigeria (CBN) adjusted the policy of diaspora remittance inflow to stimulate growth and ease forex scarcity across the nation.

Therefore, Stanbic IBTC said the decision to discontinue its bureau de change operations was because of the recent changes in diaspora inflow that now affords customers the opportunity of purchasing foreign exchange (PTA and BTA) directly from Stanbic IBTC Bank at any of its branches nationwide.

In a statement signed by Chidi Okezie, Company Secretary, Stanbic IBTC, said the bureau de change business was discontinued effective from 01 January 2021 through relinquishing of its operating license.

The intention is to repurpose this subsidiary for other business ventures in the near future, and stakeholders would be duly notified when all engagements have been concluded in this regard,” it stated.

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