Forex

Markets Update: Oil Extends Slump as Euro Gains Before ECB Meet

Published

8 years ago

March 9, 2017

Oil Extends Slump as Euro Gains Before ECB Meet

Crude’s selloff deepened, with prices slumping a fourth day amid a broad commodities retreat that dragged down European stocks. Bonds moved higher, while the euro strengthened with the dollar as investors prepare for key central bank meetings.

Oil couldn’t sustain an early bounce after data showing U.S. inventories at a record battered prices Wednesday. West Texas Intermediate dropped below $50 per barrel as metals also fell. Commodity producers dragged European stocks lower, while the euro rose before Thursday’s European Central Bank meeting, where no change in monetary policy is expected. The Bloomberg Dollar Spot Index is headed for its best back-to-back weeks since December on bets the Fed will raise borrowing costs next week.

The falling commodity prices may provide timely support for the message from the ECB and President Mario Draghi, who are expected to reiterate that monthly bond purchases will run until at least December. While euro-area inflation is currently at 2 percent for the first time in four years, price growth has been largely driven by energy rather than core goods and services, and high unemployment shows the economy still has slack.

“Until wages and service prices pick up the ECB will remain cautious,” said Semin Soher, senior portfolio manager at Pioneer Investments in Dublin. “They’re likely to look through February inflation as fleeting rather than durable” because of transitory energy prices, she said.

What’s ahead for the markets:

Mario Draghi is expected to keep QE going until the end of the year with underlying price pressures muted. The ECB’s policy decision will be announced at 1:45 p.m. Frankfurt time and Draghi will hold a press conference 45 minutes later.
Official U.S. jobs data for February are due Friday. Employers probably added around 200,000 workers to payrolls, in line with the average over the past six months and a sign of steady job growth, economists forecast.

Here are the main moves in markets:

Commodities

WTI crude dropped 2 percent to $49.30 a barrel as of 7:11 a.m. in New York. It tumbled more than 5 percent the previous session to the lowest close since Dec. 7.
Gold fell 0.3 percent to $1,204.99 an ounce, declining for a fourth day as metals sold off across the board.

Stocks

The Stoxx Europe 600 Index retreated 0.3 percent, with energy companies and miners posting the biggest declines.
Futures on the S&P 500 fell 0.1 percent after the benchmark index lost 0.2 percent on Wednesday.

Currencies

The Bloomberg Dollar Spot Index rose 0.1 percent after gaining 0.4 percent Wednesday.
The British pound fell 0.1 percent as the euro added 0.2 percent.

Bonds

Yields on 10-year U.S. Treasuries traded fractionally higher at 2.569 percent after adding 25 basis points over the past eight days.
German bonds were choppy ahead of the ECB meeting, with the 10-year yield rising two basis points. Most other European government bonds advanced, with the yield on 10-year Italian and Spanish bonds each dropping three basis points.

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Samed Olukoya

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

Nigerian Naira Falls to N1,641.27 Amid Improved FX Supply

Published

8 hours ago

October 12, 2024

Iyanuoluwa Martins

The Naira closed the week weaker against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, October 11 to N1,641.27/$1, as the local currency lost 1.15 per cent at the specialised window, according to data obtained from FMDQ Securities Exchange.

The week’s closing value was down N18.70 compared to N1,622.57/$1 published in the preceding session on Thursday.

There was a surge in turnover recorded on Friday as secondary data showed an aggregate of $616.73 million cleared on record, compared to $145.56 million, a rise of $471.17 million or 323.7 per cent.

This is more than $543.5 million announced by the Central Bank of Nigeria (CBN) announced that it sold to authorised dealer local deposit money banks (DMBs) to reduce observed market volatility driven by high demand for commodity imports and seasoned demand for FX between September 6 and 30, 2024.

The rise in supply could be a result of fresh CBN intervention in the market after it had paused for the past two weeks.

In a different pattern, the local currency closed flat against the Pound Sterling and the Euro in the week’s closing session at the official FX market.

Trading against the British currency, the local currency closed at N2,126.26/£1 while it closed at the rate of N1,772.69/€1 against the Euro.

In the Parallel market, the Naira gained on the American currency as it closed at N1,673.54 to the US Dollar, a rise of 94 Kobo compared to N1,674.48/$1 it closed during the Wednesday trading session.

The Naira strengthened its value against the Pound Sterling in the official market by N3.70 to sell at N2,136.68/£1 compared with the preceding session’s N2,140.38/£1 and followed the same pattern against the Euro as it appreciated N7.54 to quote at N1,830.29/€1 versus the previous day’s rate of N1,837.83/€1.

The local currency also appreciated N8.59 to close at N1,202.47 per Canadian Dollar, compared to Wednesday’s N1,211.06 per CAD.

Naira

Naira Records Marginal Rise on Dollar as Supply Weakens

Published

2 days ago

October 11, 2024

Iyanuoluwa Martins

The Naira exchange rate improved slightly in the official forex market as the Central Bank of Nigeria (CBN) failed to resume the retail Dutch auctions again.

The Naira rose by 0.16 percent on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) to exchange at N1,622.57/$1 on Thursday, October 10 amid a further drop in supply at the official market.

The local currency rose on the greenback by N2.56 versus N1,625.13/$1 which it closed at the previous session on Wednesday.

Demand for foreign currency continues to overshadow FX liquidity, leaping exchange rate movement tight across the markets.

Data showed a decline in supply as the turnover published on the FMDQ Group website stood at $145.56 million. This indicated that the session’s turnover fell by 14.7 percent, indicating an appreciation of $25.04 million compared to the $170.60 million published in the last trading session.

Meanwhile, the Naira witnessed losses against the Pound Sterling and the Euro. The domestic currency made a N41.18 slide on the British currency to wrap the penultimate session at N2,126.26/£1 from N2,085.08/£1 that it sold at the previous session.

In the same trend, against the Euro, the Nigerian currency closed at N1,772.69/€1 versus N1,746.58/€1, indicating an N26.11 depreciation.

In the Parallel market, the Naira closed at N1,674.48 to the US Dollar, a difference of N22.32 compared to N1,652.16 it closed during the Wednesday trading session.

The gap between official and parallel market rates had crossed N120 in the recent past until the Central Bank of Nigeria FX intervention which has brought the gap within N50-N60 on the greenback.

The Naira weakened its value against the Pound Sterling in the official market by N27.19 to sell at N2,140.38/£1 compared with the preceding session’s N2,113.19/£1.

It followed the same route against the Euro as it appreciated N22.57 to quote at N1,837.83/€1 versus the previous day’s rate of N1,815.26/€1.

The local currency also pulled a N4.66 depreciation to close on the Canadian Dollar at N1,211.06 against Wednesday’s N1,206.40 per CAD.

Naira

Naira Gains on Dollar at Black Market, Falls at Official FX Market

Published

3 days ago

October 10, 2024

Iyanuoluwa Martins

The Naira strengthened on the US Dollar at the black market but went the other route in the official market on Wednesday, October 9.

The local currency gained N15.23 from the N1,667.39 it closed in the previous session to settle at N1,652.16 at the black market on Wednesday.

At the Nigerian Autonomous Foreign Exchange Market (NAFEX), the local currency lost N63.37 or 4.1 percent to close at N1,625.13/$1, weaker from N1,561.76/$1 it closed on Tuesday.

The daily supply of FX as measured by secondary data from FMDQ Securities Exchange Limited indicated that turnover slumped by $83.08 million or 32.7 percent to $170.60 million from $253.68 million.

The decline in supply comes as the Central Bank of Nigeria (CBN) eased with the latest data indicating that the country is not making enough foreign earnings.

For instance, Foreign Direct Investment into Nigeria in the second quarter of 2024 dropped to $29.83 million, a 65.33 percent drop compared to the $86.03 million recorded in the same period last year.

The development marks the lowest level in the last ten years.

It also reflected in both portfolio investments and foreign currency loans as Nigeria’s foreign portfolio investments for Q2 2024 stood at $1.40 billion, marking a sharp decline of 74.97 percent from $5.60 billion recorded in the preceding quarter, and a 65.3 percent drop compared to the $4.05 billion reported in Q2 2023.

Similarly, foreign loans, which constitute a substantial portion of Nigeria’s capital importation, recorded an inflow of $1.15 billion in Q2 2024, reflecting a 74.98 percent decrease from $4.60 billion in Q1 2024.

However, the Naira strengthened its value against the Pound Sterling in the official market by N46.54 to sell at N2,085.08/£1 compared with the preceding session’s N2,131.62/£1.

It followed the same route against the Euro as it appreciated N42.40 to quote at N1,746.58/€1 versus the previous day’s rate of N1,788.98/€1.

The local currency also recorded a gain on the UK Pound Sterling in the black market, the Naira rose to N2,113.19 an N18.94 gain from N2,132.13 and on the Euro, the Naira pulled an N18.37 appreciation to close at N1,815.26 versus N1,833.63 and added 53 cents on the Canadian Dollar to close at N1,206.40 against Monday’s N1,206.93 per CAD.