Forex

Global Stocks Tumble After U.S. Selloff; Yen Gains

Published

7 years ago

March 22, 2017

Global Stocks Tumble After U.S. Selloff; Yen Gains

Equities tumbled across the globe after the S&P 500 Index fell the most since Donald Trump’s election, as stocks joined an unwinding of reflation trades amid uncertainty over prospects for the U.S. president’s policies. The yen rose a seventh day as investors sought safety.

Financial and commodity shares led the global selloff as benchmark indexes in Japan and Australia slid the most since early November and European stocks fell for a third day. The S&P 500 sank more than 1 percent for the first time since Oct. 11, while a gauge of emerging-market stocks halted an eight-day rally. A slump in government bond yields continued and the yen reached the highest since November. Gold extended gains while base metals tumbled, with iron ore approaching a bear market.

Volatility in financial markets is soaring after a period of relative calm as concern is mounting that pro-growth U.S. policies won’t sail through Congress. The Republican plan to repeal and replace Obamacare is drawing strong opposition ahead of a crucial floor vote in the House. Top Republicans warned failure to pass a health-care bill on Thursday could imperil tax and spending reforms.

“The reality is setting in that markets have expected too much from Trump,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “Investors are recalibrating expectations to reflect the reality that Trump’s pro-growth agenda will not happen overnight but will take time and legislation. Markets have also gone up sharply — that allows for a technical correction.”

Equities until now have largely escaped investors’ efforts to unwind so-called Trump trades. While the dollar has been falling steadily since the beginning of the year, dropping more than 4 percent from a January peak, global stocks have been marching higher. The MSCI All Country World Index reached a record last week while the MSCI Emerging Markets Index closed Tuesday at the highest since June 2015.

“I believe markets do need a good reason to take profits, and here it is, ” Margaret Yang, an analyst at CMC Markets in Singapore, wrote in an email. “This is a healthy step back because too much optimism has been priced in and markets have gone too high and too far.”

Here are the main moves in markets:

Stocks

The MSCI Asia Pacific Index dropped 1.4 percent as of 8:20 a.m. in London, the most since mid-December. Japan’s Topix lost 2.1 percent, the biggest loss since Trump’s election. The selloff came despite data showing Japan’s exports rose the most in two years in February. Australia’s S&P/ASX 200 fell 1.6 percent, also the most since November.
The MSCI Emerging Markets Index dropped for the first time in nine days, down 0.8 percent. The Hang Seng Index dropped 1.1 percent, while a measure of Chinese shares traded in Hong Kong lost 1.8 percent after closing at the highest in almost 17 months on Tuesday.
The Stoxx Europe 600 fell 0.8 percent, slumping for a third day with banks leading declines.
Futures on the S&P 500 fell 0.1 percent. The benchmark index tumbled 1.2 percent to the lowest since Feb. 14 on Tuesday. Banks sank 2.9 percent for the steepest slide since June 24, the day after the U.K. vote to leave the European Union.

Currencies

The Bloomberg Dollar Spot Index was flat, following a five-day decline.
The yen strengthened 0.3 percent to 111.37 per dollar, extending its longest winning streak since mid-January. The Australian dollar slipped 0.3 percent.
The British pound increased less than 0.1 percent after jumping 1 percent Tuesday as U.K. inflation accelerated more than forecast to break through the Bank of England’s target for the first time since 2013. The euro slipped less than 0.1 percent to $1.0804 after climbing 0.7 percent in the previous session.

Bonds

The yield on 10-year Treasury notes declined one basis point to 2.41 percent, after sliding four basis points in each of the past three sessions.
Australian 10-year yields dropped five basis points to 2.76 percent. New Zealand equivalent rates retreated two basis points to 3.20 percent.

Commodities

West Texas Intermediate oil fell 0.5 percent to $47.98, dropping for a third day as U.S. crude supplies are forecast to climb.
Iron ore retreated, with futures for September delivery falling more than 6 percent.
Copper lost 0.7 percent following a 1.8 percent drop in the previous session amid signs supplies are returning. Disruptions caused the metal to surge last month to the highest level since 2015. Nickel fell 1.9 percent.

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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

Black Market Dollar (USD) to Naira (NGN) Exchange Rate Today 25th July 2024

Published

2 days ago

July 25, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of July 25th, 2024 stood at 1 USD to ₦1,595.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,580 and sold it at ₦1,570 on Wednesday, July 24th, 2024.

This indicates a decline in the Naira exchange rate value when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

Buying Rate: ₦1,595
Selling Rate: ₦1,585

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Forex

IMTOs Drive 38.86% Rise in Foreign Exchange Inflows to $1.07bn in First Quarter of 2024

Published

4 days ago

July 23, 2024

Samed Olukoya

Foreign exchange inflows into Nigeria surged by 38.86% to $1.07 billion in the first quarter of 2024, according to the Central Bank of Nigeria’s (CBN) latest quarterly statistical bulletin.

This increase is attributed to the enhanced contributions from International Money Transfer Operators (IMTOs).

In January, IMTOs facilitated inflows amounting to $383.04 million. This figure dipped slightly to $322.83 million in February but rebounded to $363.70 million by March, this upward trend represents a 10.74% growth from the previous quarter of 2023.

The surge in forex inflows comes at a critical time for Nigeria, as the country continues to grapple with economic challenges, including inflation and a fluctuating naira.

The increased foreign exchange reserves are expected to provide much-needed stability to the naira and bolster Nigeria’s economic standing in the global arena.

CBN Governor Dr. Olayemi Cardoso has underscored the importance of remittances from the diaspora, which constitute approximately 6% of Nigeria’s GDP.

The recent approval of licenses for 14 new IMTOs is seen as a strategic move to enhance competition and lower transaction costs, thereby encouraging more remittances to flow through formal channels.

“We recognize the significant role that IMTOs play in our foreign exchange ecosystem,” Dr. Cardoso remarked during a recent press briefing.

“The inflows we’ve seen are a testament to the effectiveness of our strategy to engage with these operators and ensure that more remittances are channeled through official avenues.”

The CBN has also introduced measures to facilitate IMTOs’ access to naira liquidity at the official window, aiming to streamline the settlement of diaspora remittances.

This initiative is part of the broader effort to stabilize the forex market and address the persistent challenges of foreign currency availability.

The bulletin also revealed that the inflow from IMTOs has contributed significantly to Nigeria’s overall forex reserves, which are crucial for economic stability and growth.

Analysts suggest that the increased remittances will support the naira, providing relief amidst the country’s ongoing economic adjustments.

Forex

CBN Resumes Forex Sales as Naira Hits N1,570/$ at Parallel Market

Published

1 week ago

July 19, 2024

Samed Olukoya

The Central Bank of Nigeria (CBN) has resumed the sale of foreign exchange to eligible Bureau De Change (BDC) operators.

The decision was after Naira dipped to N1,570 per dollar in the parallel market,

CBN announced that it would sell dollars to BDCs at a rate of N1,450 per dollar. This decision aims to address distortions in the retail end of the forex market and support the demand for invisible transactions.

Following the CBN’s intervention, the dollar, which recently traded as low as 1,640 per dollar, has shown signs of stabilization.

The apex bank’s action is expected to inject liquidity and restore confidence among market participants.

BDC operators have welcomed the move. Mohammed Magaji, an operator in Abuja, noted that the dollar was selling at 1,630 per dollar.

He emphasized the market’s volatile nature but expressed optimism about the CBN’s intervention.

Aminu Gwadebe, President of the Association of Bureau de Change Operators of Nigeria, attributed the naira’s decline to acute shortages, speculative activities, and increased demand due to recent duty waivers.

He praised the CBN’s action as a necessary step to alleviate market pressures.

The CBN’s efforts include selling $20,000 to each eligible BDC, with a directive to limit profit margins to 1.5% above the purchase rate.

This strategy aims to ensure that end-users receive fair rates and to curb inflationary pressures.

The CBN’s ongoing reforms seek to achieve a market-determined exchange rate for the naira. As the naira continues to navigate turbulent waters, stakeholders remain hopeful that these measures will lead to a more stable and liquid forex market.

Market analysts suggest that sustained interventions and increased access to foreign exchange could help reverse the naira’s downward trend.

The CBN’s actions demonstrate a commitment to tackling the challenges facing the foreign exchange market and supporting Nigeria’s economic stability.