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Gold and Yen Extend Rallies on EU, Trump Concerns

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  • Gold and Yen Extend Rallies on EU, Trump Concerns

Lingering concern over Donald Trump’s policies and the U.K.’s position in the European Union accelerated a move toward safer assets, with rallies in gold and the yen stretching to a seventh day. Treasuries rose and Asian stocks fell with U.S. equity futures.

Chinese shares extended a rout to six days, their worst run in three years. The yen continued its longest streak since the run-up to the U.K.’s Brexit vote last year, sending Japan’s Topix down the most since November. The dollar fell against most major currencies before a speech by U.K. Prime Minister Theresa May in London where she will say that the U.K. is likely to pull out of the EU’s single market for goods and services and seek a completely new trading relationship with the bloc.

Stock investors are assessing whether the market has run too far during its two-month rally leading up to Donald Trump’s inauguration as U.S. president on Friday. About $3 trillion was added to the value of global stocks in that time as the dollar surged amid signs of inflation and growth picking up. The International Monetary Fund is taking a cautious stance toward Trump’s policies, assuming a modest boost to the U.S. economy from his promise of fiscal stimulus, and upgraded its growth forecast for China’s economy in 2017 to 6.5 percent.

“We’ve had a strong rally in equities and we remain cautious,” said Niv Dagan, Melbourne-based executive director at Peak Asset Management LLC. “There is a bit of angst and nervousness leading up to Trump’s inauguration and on the U.K.’s position in Europe. We expect this volatility to continue in the near term.”

Here are the main moves in markets.

Stocks

  • The MSCI Asia Pacific index fell 0.1 percent as of 3:02 p.m. in Tokyo, dropping for a third straight day.
  • Futures on the S&P 500 Index slumped 0.3 percent. U.S. markets were closed Monday for a holiday.
  • The Shanghai Composite lost 0.2 percent, paring an earlier drop of 1 percent. The Hang Seng was up 0.6 percent.
  • Japan’s Topix index fell 1.4 percent, the biggest drop since Nov. 9, to the lowest level in more than a month. Australia’s S&P/ASX 200 Index slipped 0.9 percent.

Currencies

  • The Bloomberg Dollar Spot Index lost 0.6 percent, poised for the lowest level in a month. The U.S. currency fell 0.8 percent against the South African rand and 0.6 percent versus the Mexican peso.
  • The yen traded at 113.57 per dollar, up 0.6 percent. The currency has strengthened 3 percent over seven sessions, touching the highest level since early December.
  • The pound rose 0.4 percent to $1.2089, erasing an earlier decline after plunging as much as 1.6 percent Monday. The euro climbed 0.4 percent to $1.0648.

Bonds

  • The yield on 10-year Treasuries dropped four basis points to 2.36 percent, after dropping two basis points last week. The securities were shut worldwide on Monday for Martin Luther King Day.

Commodities

  • Gold climbed 0.7 percent to $1,211.19 per ounce, extending its winning streak to seven days, the longest since November. Spot gold prices are at the highest since Nov. 23.
  • Crude oil futures slipped 0.1 percent to $52.31 a barrel.
  • Iron ore dropped for the first time in seven days, falling 0.6 percent. Futures had rallied 16 percent over the previous six days.

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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Naira

Naira Depreciates 2.4% Against US Dollar Despite Surge in Market Supply

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The Naira recorded a 2.4 percent depreciation against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday to close at N1,678.87 per Dollar despite a significant surge in supply volume in the official market.

At the previous session on Thursday, the Naira closed down at N1,639.50/$1, indicating a decrease of N39.37 at the approved market.

A turnover of $1.403 billion was on record at the market, according to data from the FMDQ Securities Exchange Limited. This indicated a $1.158 billion or 473.1 percent jump versus the $244.96 million quoted recently.

The surge in supply indicates that the Central Bank of Nigeria (CBN) issued guidelines to banks on implementing the free foreign exchange deposit window which gives banks the liberty to trade with the forex made available by scheme participants.

According to the document released this week titled “Guidelines On Implementation Of The Foreign Currency Disclosure, Deposit, Repatriation, And Investment Scheme, 2024,” the apex banks said commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed.

In a different trend, the domestic currency witnessed a flat outcome against the British currency and the Euro in the week’s closing session.

On the Pound Sterling, the local currency closed at N2,160.43/£1 and N1,796.61/€1 on the Euro.

In the parallel market, the local currency strengthened against the US Dollar, the Euro, and the Canadian Dollar but weakened against the Pound Sterling.

The Naira gained N12.89 against the American currency to close at N1,708.59 to the US Dollar compared to N1,721.48/$1 it closed on Thursday.

Against the Euro, the Naira quoted at N1,845.11/€1 versus the previous day’s rate of N1,848.28/€1 as it added N3.17 and against the Canadian Dollar, it appreciated by N7.77 to close at N1,224.09 per Canadian Dollar, compared to N1,231.86 per CAD in the recent session.

On the English currency, there was fall of 72 Kobo to wrap the final  session at N2,216.09/£1 from N2,215.37/£1.

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Naira

Naira Rises 2.5% on Dollar at Official Market, Slides at Parallel FX Market

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Naira Exchange Rates - Investors King

The Naira appreciated on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, November 7, as the local currency sold for N1,639.50/$1.

This happened as improved supply boosted the rate as the market faced heavy illiquidity.

At the official market, the domestic currency recorded a 2.51 per cent or N42.15 drop compared to the N1,681.65/$1 it was valued at the previous session on Wednesday.

This occurred as supply rose at the session as turnover published on the FMDQ Group website stood at $244.96 million indicating that the session’s turnover climbed by 24.5 per cent, indicating that there was an increase of 48.18 million compared to $196.78 million which was published the day (Wednesday).

Since the administration of President Bola Tinubu came into power, the Naira has fallen 72 percent. This is largley due to illiquidity in the FX market has led to volatile outcomes for the Naira despite the country recording high fixed-income yields and the local currency getting interventions from the Central Bank of Nigeria (CBN).

Also, the domestic currency witnessed gains against the British currency and the Euro in the week’s penultimate session.

On the Pound Sterling, the local currency made a rise of N8.94 to wrap the session at N2,160.43/£1 from N2,169.37/£1 that it sold at the previous session and against the Euro, the Nigerian currency closed at N1,796.61/€1 versus N1,819.86/€1, indicating an N23.25 appreciation.

In the parallel market, the local currency weakened further against the US Dollar and the Canadian Dollar but made gains against the Pound Sterling and  the Euro.

The Naira lost N5.75 against the greenback to close at N1,721.48 to the US Dollar compared to N1,715.73/$1 it closed on Wednesday.

Against the Canadian Dollar as it depreciated further by 63 Kobo to close at N1,231.86 per Canadian Dollar, compared to the midweek’s N1,231.23 per CAD.

On the English currency, there was rise of N4.42 to wrap the session at N2,215.37/£1 from N2,219.79/£1 and it appreciated N11.81 on the Euro to quote at N1,848.28/€1 versus the previous day’s rate of N1,860.09/€1.

 

 

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Naira

Naira Falls Across Multiple FX Windows as Trump Emergence Boost Dollar Value

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Naira Exchange Rates - Investors King

The Naira weakened to N1,681 per Dollar on Wednesday, November 6 in the official foreign exchange market, the Nigerian Autonomous Foreign Exchange Market (NAFEX) as the American Dollar strengthened in the global market following the emergence of Donald Trump as the US president.

The local currency fell by N10.33 or 0.61 percent to close at N1,681.65/$1 compared with Tuesday’s closing rate of N1,671.32/$1.

The daily supply of FX as measured by secondary data from FMDQ Securities Exchange Limited indicated that turnover slumped by $21.99 million or 10.1 percent to $196.78 million from $218.77 million.

The decline in supply comes as the Central Bank of Nigeria (CBN) limited the sale of forex in order to regulate cash sales in the FX market to ensure stability and compliance.

Also, the emergence of Donald Trump as the next US president made the Dollar stronger and weakened a host of other currencies, like the Naira.

The market will be looking forward to Trump’s potential policies and what it would mean for the global economy.

However, the Naira weakened in its value against the Pound Sterling in the official market by N8.74 to sell at N2,169.37/£1 compared with the preceding session’s N2,160.63/£1.

It closed flat against the Euro in the midweek to trade at the rate of N1,819.86/€1.

The local currency also weakened across the Dollar, Pound Sterling, and the Canadian Dollar in the black market.

The Naira lost N7.38 against the greenback to close at N1,715.73 to the US Dollar compared to N1,708.35/$1 it closed on Tuesday.

The Naira lost N3.33 to sell at N2,219.79/£1 compared with the preceding session’s N2,216.46/£1 and against the Canadian Dollar as it depreciated further by N6.61 to close at N1,231.23 per Canadian Dollar, compared to Tuesday’s N1,224.62 per CAD.

However, it followed a different pattern against the Euro as it appreciated N4.48 to quote at N1,860.09/€1 versus the previous day’s rate of N1,864.57/€1 and it extended losses

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