- Forex Weekly Outlook March 13-17
If there is anything the US economic data confirmed last week, it was the Federal Reserve’s rate decision and the solid labour market. The economy added 235,000 jobs in February, following a 238,000 job in January. Making it the best back-to-back gain since July 2016.
The unemployment rate also improved to 4.7 percent from 4.8 percent recorded in January, indicating additional improvement in the participation rate which increased from 62.9 percent to 63 percent.
However, the wage growth was below the 0.3 percent projected by most economists, rising just 0.2 percent in February after January year-on-year wage growth was revised down from 2.9 percent to 2.8 percent. This further validated the Fed’s concerns regarding sustainability once the interest rate is increased. Therefore, clouding the potential of the U.S assets amid series of uncertainty emanating from the country.
Also, on a critical look into the report, about 26,000 jobs were lost in the retail sector of the economy in the same month. Meaning, the retail sector that formed the bulk of the services sector that constituted 70 percent of the entire American economy is not creating jobs, as retail owners are reportedly worried about the impact of the proposed border tax on their imports and subsequently profit margin. Therefore, if the Federal Reserve raise rate this week, the subsequent increase would depend on how well fiscal stimulus complement monetary adjustment in terms of job creation, wage growth and productivity. Putting the likelihood of the third rate hike this year in question.
In Euro-Area, the economy rose 0.4 percent in the final quarter of 2016. Boosting investors’ confidence to its highest level post-recession but with both household consumption and government spending surging 0.2 percent and 0.1 percent respectively, the ECB was forced to raise its growth forecast to 1.8 percent in 2017 and 1.7 percent in 2018.
Although, the European Central Bank president Mario Draghi has attributed the renewed confidence and growth in the region to surging commodity prices and argued that the underlying fundamentals remain weak. Economic experts believed the improvement in global economic outlook is aiding the region, but that the weak wages and rising inflation remain a concern.
In Canada, the economy added another 15,300 jobs in February, bringing the total jobs created in the past 12 months to 288,100 and unemployment rate to 6.6 percent from 6.8 percent.
Canadian strong job market has been supporting household spending, though there are worries around the quality of those jobs. The Bank of Canada has highlighted “subdued” wage growth and hours worked as evidence of continued lack in the country’s labor market, even with recent job gains.
Overall, the global economy is stronger in the first quarter of 2017 than what was obtained last year. But the uproar in the euro-area political sphere and uncertainty in the US continued to cast a shadow on both the financial markets and global economy.
This week NZDCAD, EURJPY, EURNZD and NZDJPY top my list.
This pair has lost around 608 pips since peaking at 0.9923 price levels in November 2016. Confirming the renewed interest in the Canadian dollar after OPEC reached consensus and a more favourable bilateral trade deal with the US following a series of positive comments from Donald Trump since winning the US election.
Also, the last 5-week candlesticks don’t just attests to downside pressure but correlate with the underlying fundamentals of the paired currencies and validated by the gravestone doji established two weeks ago. This week, I am bearish on this pair and will be looking to sell below 0.9298 for 0.9108 targets.
Since I mentioned this pair last week, it has gained 137 pips but still below our target of 124.18. Nevertheless, I expect the growing odds of the Fed raising rates and the eventual rates increase to impact the attractiveness of the Japanese yen and further aid this pair.
Also, given continued growth and renewed confidence in the euro-area I remained bullish on this pair while monitoring both Netherland-Turkish and France political uprising.
This pair has gained about 322 pips since I mentioned it last week but was 63 pips short of our target (1.5469). While I remained bullish on this pair this week, it is advisable to adjust stop lost to lock-in part of the profit realized last week while leaving moderate room for price movement.
For the past three weeks, I have been mentioning this pair and its sell opportunities. Even though it was slower the other pairs but it was consistent and has given us 214 pips in total. However, last week it was 5 pips short of our first target at 78.83. This week, I remained bearish on this pair and will look to add to my position below 78.83 support levels.
Akinwumi Adesina Extols Africans in Diaspora on Cross-Border Remittance
African Development Bank (AfDB) President, Akinwumi Adeshina has extolled the tenacity and impacts of Africans in Diaspora on cross-border remittance.
According to the AfDB President, Africans in the diaspora are the continent’s largest financiers through their yearly remittances.
Speaking at an event organised by the Bank in collaboration with the African Union Commission, Adeshina noted that cross-border remittance into Africa is more than development assistance to the continent.
Investors King earlier reported that remittance into Nigeria and other countries in the sub-Sahara Africa region hits $53 billion in 2022.
The AfDB President said, “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021. Yet official development assistance to Africa in 2021 was $35 billion, or 36% of the remittances from the diaspora”.
Adeshina added that Egypt and Nigeria are among the top-ten remittance recipients globally, with $31.5 billion and $19.2 billion, respectively in 2021.
While speaking on the advantage of cross-border remittance to the African continent, the AfDB president noted that remittances have helped to meet financial, food, education, and health needs of many Africans, “it as well as serve as countercyclical sources of finance,” he said.
“The African diaspora has become the largest financier in Africa! And it is not debt, it is 100% gifts or grants, a new form of concessional financing that is the key for livelihood and security for millions of Africans” he added.
Similarly, Adeshina further positioned the need to eliminate premium charges on cross-border remittance into Africa. He noted that cross-border into Africa is twice what is it for South Asia.
He concluded that the Africans in diaspora can add more than remittance and investment, noting that they have skills, knowledge and know-how which can be needed for the development of the continent.
“They can help build world-class universities, and they can be mentors for the new generation of Africans,” he said.
E-Naira Transaction Volume Rises to N5 Billion in November Amid Intensified Campaign
More Nigerians embrace eNaira wallet as CBN takes adoption campaign across the nation
The Central Bank of Nigeria, (CBN) has disclosed that e-Naira transaction volume rose to a record N5 billion in the month of November following a series of campaigns initiated to encourage adoption.
Investors King had earlier reported how the e-Naira adoption team visited a number of parks in Abuja and the University of Lagos among other locations to drive the adoption of the digital currency.
Speaking at the Second Edition of the Africa Cashless Payment Conference, CBN’s Director of Information and Technology, Hajiya Rakiya Mohammed noted that transaction on the e-naira platform does not attract any charges.
She stated that Nigeria’s financial ecosystem is large to accommodate everyone.
Hajia Rakiya added that the e-Naira platform can be operated in any of Nigeria’s major local languages, stating that onboarding onto the e-Naira platform is a simple process.
She further stressed that the primary goal of the e-naira is to reduce the amount of cash in circulation, thereby downsizing the cost of producing paper currency, increase in revenue and direct disbursement to citizens.
Meanwhile, the e-Naira circulation has reached N401.82 million as more Nigerians embraced the digital currency.
It could be recalled that on October 25, 2021, CBN launched the e-Naira making Nigeria the first African country to have a digital currency.
During the unveiling of the e-Naira in Abuja, President Muhammadu Buhari stated that the digital naira would increase remittances, foster cross-border trade, improve financial inclusion and enable the government to make welfare payments more easily.
On his part, the CBN Governor, Godwin Emefiele disclosed that the e-Naira offered Nigerians endless possibilities in using financial services.
While admonishing more Nigerians to embrace the digital naira, Hajia Rakiya noted that “both banked and unbanked can use it, and it can be done through USSD *997#. We have integrated it with telecoms and NIBBS instant payments plus integration with money transfer operations so you can use e-naira for cross border”.
CBN Will Redesign Naira Notes Every Five to Eight Years; Say Emefiele
The central bank will henceforth redesign the nation’s legal tender every five to eight years
Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the bank will henceforth redesign the nation’s legal tender every five to eight years.
The apex bank governor revealed at the unveiling of the new naira notes on Tuesday.
Godwin Emefiele explained that the naira redesign is in line with global best practice noting that the naira needed to be redesigned and re-issued every five to eight years.
According to the CBN governor, previous administrations lacked the political will to approve the redesign of the naira notes. Stating that it is regrettable that the naira has not been redesigned for the past 19 years.
“In the past, I have to confess that attempts by the CBN to redesign and re-issue the naira notes have been resisted. It is only President Muhammadu Buhari that has exhibited the courage to do so,” the CBN governor stated.
Emefiele added that going forward, naira notes will be redesigned at intervals to address some peculiar issues.
“After today, the CBN will begin to redesign and reissue the naira every five to eight years,” he said.
Investors King had earlier reported that President Muhammadu Buhari unveiled the redesigned naira notes at the Federal Executive Council (FEC) meeting today.
Among those who joined the president with the unveiling include the CBN governor and the EFCC chairman.
Recall, in October, the CBN announced it will redesign the N200, N500 and N1,000 notes in line with its mandate.
Meanwhile, the CBN governor has disclosed that the new naira notes can not be counterfeited because of the features embedded in them.
Similarly, he added that security agencies would be monitoring people making withdrawals at the counter to sniff out money laundering and unravel illegal usage.
“The CBN has moved to a cashless economy. We will restrain the volume of cash someone will withdraw over the counter. We will follow up with the person’s data to know the reason for such withdrawal,” he concluded.
News3 weeks ago
Npower News: NASIMS Announced “Work Nation’s” Minimum Cut-Off Mark
Travel2 weeks ago
Nigerians Eligible For Residence Permit in Norway
News3 weeks ago
Npower News: Latest Update On Npower Payment for Beneficiaries
News4 weeks ago
Npower News: NASIM Provides Requirements Resolution For Failed August Stipend
News7 days ago
Npower Batch C, Stream 2 Lament Non-Payment of Monthly Stipend
Travel2 weeks ago
Passengers Groan as Air Tickets Increase by More than 100%
News3 weeks ago
Npower Clarifies “Work Nation” Programme, State It is Optional
Startups1 week ago
5000 Startups From Nigeria, Kenya and South Africa Completed Google Training Programme