Forex

Forex Weekly Outlook December 19-23

Published

7 years ago

December 18, 2016

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.

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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.

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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.

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.

Click to enlarge

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.

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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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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

6 hours 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

1 day 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.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,260
Selling Rate: N1,250

Naira

Nigeria’s Naira Dips 5.3% Against Dollar, Raises Concerns Over Reserve Levels

Published

1 day ago

April 24, 2024

Samed Olukoya

Nigerian Naira depreciated by 5.3% against the US dollar as concerns over declining foreign reserves raise questions about the central bank’s ability to sustain liquidity.

The local currency has now declined for the third consecutive day since the Naira retreated from its three-month high on Friday shortly after Bloomberg pointed out that the Naira gains were inversely proportional to foreign reserves’ growth.

According to data from Lagos-based FMDQ, the naira’s value dropped precipitously, halting its recent impressive performance.

The unofficial market saw an even steeper decline of 6%, extending the currency’s retreat over the past three trading days to a staggering 17%.

Abubakar Muhammed, Chief Executive of Forward Marketing Bureau de Change Ltd., expressed concerns over the sharp decline, highlighting the insufficient supply of dollars in the market.

Muhammed noted that despite a 27% increase in traded volume at the foreign exchange market on Monday, the supply remained inadequate, forcing the naira to soften further while excess demand shifted to the unofficial market.

The dwindling foreign exchange reserves have been a cause for alarm, with Nigeria’s gross dollar reserves steadily declining for 17 consecutive days to reach $32 billion as of April 19, the lowest level since September 2017.

This worrisome trend has raised questions about the adequacy of dollar inflows to rebuild reserves, especially after the central bank settled overdue dollar obligations earlier in the year.

Samir Gadio, Head of Africa Strategy at Standard Chartered Bank, pointed out that while the naira had been supported by onshore dollar selling, the rally was likely overextended.

Gadio warned that the emergence of a dislocation in the market, with domestic participants selling dollars at increasingly lower spot levels was unsustainable and necessitated a correction.

The central bank’s efforts to stabilize the naira have been evident with interventions aimed at improving liquidity.

However, the effectiveness of these measures remains uncertain, particularly as the central bank offered dollars to bureau de change operators at a rate 17% below the official rate tracked by FMDQ.

Analysts, including Ayodeji Dawodu from Banctrust Investment Bank, foresee further challenges ahead, predicting that the naira will likely stabilize around 1,500 against the dollar by year-end.

Dawodu emphasized the importance of stabilizing the currency to attract strong foreign capital inflows, underscoring the significance of sustainable monetary policies in Nigeria’s economic recovery.

As Nigeria grapples with the repercussions of the naira’s depreciation and declining foreign reserves, policymakers face mounting pressure to implement measures that ensure stability and foster confidence in the economy.

The road ahead remains uncertain, with the fate of the naira intricately tied to Nigeria’s ability to address underlying economic vulnerabilities and bolster investor trust.