Forex

Forex Weekly Outlook March 27 – 31

Published

8 years ago

March 26, 2017

Forex Weekly Outlook March 27 – 31

The US dollar slid to its lowest in 4 months on Wednesday following Donald Trump failed health care bill that has raised questions about his administration’s ability to push its pro-growth agenda through congress. This uncertainty has rendered the US dollar unattractive and led to massive sales of the currency across the board, as investors are beginning to doubt the feasibility of Trump’s proposed tax cut and increase job creation.

In the U.k, inflation rose more than forecast in February to 2.3 percent, the highest since 2013. While, investors are waiting for Theresa May to officially trigger article 50 of Lisbon treaty on March 29, experts are projecting the slowdown in consumer spending to further decline to about 2 percent this year from 3 percent recorded in 2016.

Also, inflation in the region is expected to reach a new height as uncertainty surrounding the U.K economic outlook ahead of Brexit continues to weigh on new job creation, business sentiment, costs of import goods and profits of companies that generate the bulk of their revenues from overseas.

Overall, the US dollar has given back almost all it gained through popular ‘Trump Rally’ after last week failed health care bill. However, the US economy remained strong and projected to meet and sustained 2 percent inflation target going forward. But the uncertainty surrounding economic policy remains.

Likewise, the Euro-area economy has revamped strongly following the surge in global commodity prices. Therefore, I expect the euro single currency to dip during the official Brexit process but not as much as the British pound.

This week, CADJPY and NZDPY

CADJPY

This pair plunged 133 pips to meet our last week’s target 1 at 83.11 support levels. However, due to the increased uncertainty regarding OPEC 2nd production cut amid the surge in the US shale production. I am expecting a break below 83.11 support to increase the attractiveness of this pair and open up 80.27 support levels (2nd target). This is partly because the Canadian dollar is crude oil driven and of recent has started reacting to US positive policy owning to the trade relationship between the two nations.

Also, the Japanese yen is likely to continue its gain this week, especially with Theresa May officially triggering article 50 on Wednesday and the US uncertainty reaching a new peak after failed health care bill. Therefore, I remain bearish on this pair with 80.27 as the target.

NZDJPY

Since I first mentioned this pair sell potential in February. It has given us about 283 pips and closed below our first target of 78.83 last week. However, I am projecting continued gain of the Japanese yen as investors and businesses scramble to avert possible volatility following official Brexit initiation on Wednesday, hence, leading to a surge in demand for haven assets. So this week I remain bearish on this pair with 76.23 as the target as stated in the February analysis.

Last Week Recap

GBPJPY

This pair has plunged 153 pips since last week but yet to hit our first target as stated in the last analysis.

This week, I remain bearish ahead of Brexit and all the uncertainty attached to it. I will be looking to add to my sell position below 134.90 support levels.

EURNZD

A sustained break of 1.5469 is needed to validate bullish continuity as stated last week.

However, because of the uncertainty surrounding Brexit and the entire euro-area this week. I will be standing aside once our first target is met at 1.5469.

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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.