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Euro-Area Manufacturing Picks Up as Demand Drives Prices Higher

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Nigeria
  • Euro-Area Manufacturing Picks Up as Demand Drives Prices Higher

Euro-area manufacturing expanded at the strongest pace in nearly six years, with firm order growth signaling a build-up of underlying price pressures.

A Purchasing Managers’ Index climbed to 55.2 in January, IHS Markit said on Wednesday. The reading compares with a flash estimate of 55.1 and is up from 54.9 in December. A weaker euro and more expensive global commodities raised companies’ input costs, while high demand drove price growth to the fastest pace in five-and-a-half years.

With “signs of demand running ahead of supply,” there are hints of a “tentative build-up of core inflationary pressures,” said Chris Williamson, chief business economist at IHS Markit. “If current growth of manufacturing activity and the associated rise in prices is sustained, rhetoric at the ECB is likely to become more hawkish.”

The report follows data on Tuesday showing euro-area inflation accelerated to 1.8 percent last month, effectively reaching a level the European Central Bank defines as price stability. The pickup is unlikely to assuage concerns expressed by ECB President Mario Draghi that underlying cost pressures remain weak amid downside economic risks in a politically tumultuous year.

Manufacturing expanded at the fastest pace in Austria, the Netherlands and Germany. French industrial activity gathered pace, while Greece’s downturn worsened.

The 19-nation euro economy grew 0.5 percent in the final three months of 2016, the fastest pace in three quarters, and unemployment fell to the lowest since 2009. Economic confidence jumped to a six-year high in January.

“Euro-zone manufacturing is off to a strong start to the year,” said Williamson. “Optimism about the year ahead has risen to the highest since the region’s debt crisis, suggesting companies are maintaining a buoyant mood despite the heightened political uncertainty caused by Brexit and looming general elections.”

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

Naira Closed at N411.25 to US Dollar at NAFEX Window

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira declined further against the U.S Dollar on Tuesday ahead of the Ramadan holiday to trade at N411.25 to a single U.S Dollar at the Nigerian Autonomous Foreign Exchange (NAFEX) window.

The local currency plunged as low as N420.23 per dollar during the trading hours of Tuesday despite opening the day at N410.33/US$ before settling at N411.25 to a US dollar.

Investors on the window exchanged $98.33 million on Tuesday.

At the parallel section of the foreign exchange, Naira traded at N483 to a United States Dollar; N673 to a British Pound and N580 to a Euro.

Foreign exchange rates remained largely unchanged at the bureau de change section, with the Naira trading at N482 to a U.S Dollar; N674 to a British Pound and N584 to a Euro.

Several factors continue to weigh on the Nigerian Naira, especially with the foreign reserves hovering around record low and crude oil output not at an optimal level.

Other factors like rising inflation rate and drop in economic activity due to COVID-19 effect on the economy and lack of enough fiscal buffer to cushion the economy.

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Naira

Daily Naira Exchange Rates; Thursday, May 6, 2021

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Naira Exchange Rates - Investors King

Naira depreciated further at the parallel market on Thursday as the local currency traded at N485 to a United States Dollar. The Nigerian Naira exchanged at N676 to a British Pound and N585 to a Euro as shown below.

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
06/05/2021 480/485 665/676 575/585 62/69 395/405 292/320

Bureau De Change Naira Rates

Date

USD

GBP

EURO

NGN

BUY/SELL

BUY/SELL

BUY/SELL

06/05/2021

475/482

663/676

575/587

06/05/2021

475/482

663/676

575/587

Central Bank of Nigeria’s Official Naira Rates

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Forex

CBN Extends N5/$ Incentive Period to Boost Dollar Inflow

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Godwin Emefiele - Investors King

The Central Bank of Nigeria (CBN) has extended the N5 per US Dollar incentive on forex remittance indefinitely to boost liquidity and further deepen economic recovery.

The initiative was scheduled to end on May 8. It was introduced to encourage recipients of dollars to use formal banking channels and help the central bank capture such inflows to boost the stability of the local currency, which has been under pressure after oil prices plunged last year.

“We hereby announce the continuation of the scheme until further notice,” the regulator said in a statement on its website on Thursday.

The naira has been devalued three times since last year after a sharp drop in oil earnings, which accounts for 90% of foreign-exchange inflows, and remittances from workers abroad led to a dollar crunch in the West African nation, which produces the most crude in Africa. The local unit traded for 410.31 on the investors and exporters window, also called Nafex, as of 8:51 a.m. in Lagos.

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