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Forex Weekly Outlook April 3-7

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New Zealand dollar
  • Forex Weekly Outlook April 3-7

The US economy expanded more than previously estimated in the final quarter of 2016, growing at 2.1 percent annualized rated instead of the previously reported 1.9 percent. However, despite a 3.5 percent expansion rate recorded in the third quarter, the total growth in 2016 remains the worst performance since 2011 — plunging to 1.6 percent following a 2.6 percent growth rate recorded in 2015.

Nevertheless, consumer sentiment rose to 96.9 in March, signaling that Americans are less upbeat about the long-term economic outlook. But consumer spending rose less than predicted in February even with the surge in wage growth. Suggesting that surge in inflation (2.1%) may be affecting consumer spending.

Accordingly, Federal Open Market Committee are expected to raise rates further this year to moderate consumer prices and proposed fiscal stimulus by the new administration. This optimism continued to aid the US dollar’s attractiveness against other pairs and bolstered bond market outlook.

In the UK, Prime Minister Theresa May officially triggered article 50 of Lisbon Treaty on Wednesday and stated that refusal of the European Union to accept the terms of the Brexit will have security implications. Compelling the European Union President Donald Tusk to declare on Friday that defense and security won’t be bargaining chips in Brexit negotiations.

In Canada, the Canadian economy expanded by a healthy 0.6 percent in January from December, indicating first-quarter growth will be stronger than expected as the country gradually recovers from the shock of low oil prices. The Canadian dollar improved against the US dollar to 75.24 U.S. cents

Generally, the US economy remains strong and so is the U.S dollar. However, the uncertainty surrounding the economic outlook remains.

This week NZDUSD and AUDJPY top my list

The NZDUSD pair reversed 814 pips after dropping 2640 pips to 0.6195 in 2015. This reversal has carved out a wedge pattern not only to affirm that the temporary bullish trend is waning but also to ascertain bearish continuation.

Forex Weekly Outlook April 3-7

Similarly, the aforementioned correlates with our February projection that higher exchange rate would affect New Zealand consumer goods as it would have pushed the cost of goods higher and subsequently reduced consumer spending. However, inspite of this bearish view, this pair has traded moderately high against the Reserve Bank of New Zealand call for lower exchange rates.

But with the renewed US dollar’s attractiveness following policy-makers comments on three more rate hikes in 2017. I am expecting this pair to gain bearish momentum as a continuation of the long-term downward trend. A break below the wedge pattern should expose our first support of 0.6892 and sustained break of that level should give us 0.6716 targets.

AUDJPY

Considering Australia’s economic outlook and declining trade surplus that saw trade balance unexpectedly narrowed 61 percent to AUD 1.30 billion January from a downwardly revised AUD 3.33 billion surplus in December, 84.97 exchange rate is high and would hurt consumer spending further if not check. Also, I don’t see the Aussie breaking its 15-month high after dropping below 86.34 support turned resistance.

Forex Weekly Outlook April 3-7

Technically, this pair has given 435 pips since peaking at 88.16 in February, its 15-month high but after plunging 3041 pips for the past 2 years. I will be treating the new upsurge as a temporary reversal and expect a break below upward trend to open up 82.70 support levels, while a sustained break should expose our target at 80.82 as shown above.

Last Week Recap

CADJPY

Last week positive economic growth (GDP) data aided the Loonie to recover mildly against the Japanese Yen. However, with the price below 85.86, 20-moving average, I remain bearish on this pair and expect a sustained break of 83.11 to open up 80.27 targets as more sellers jump on it. Hence, I will be looking to sell bellow 83.11 support levels.

Forex Weekly Outlook April 3-7

NZDJPY

Forex Weekly Outlook April 3-7

Likewise, I remain bearish on this pair as long as 78.83 resistance holds and will be looking to add to my position.

 

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

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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US Dollar

Dollar Falls as Risk Appetite Improves, Sterling Dips on BoE

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US Dollar - Investorsking.com

The dollar dropped to its lowest point in three days on Thursday as global market risk appetite improved, while sterling zig-zagged after the Bank of England slowed the pace of its bond-buying, but left interest rates unchanged.

Fewer Americans filed new claims for unemployment benefits last week, data showed, as COVID-19 vaccination efforts and massive amounts of government stimulus led to a further reopening of the economy.

While the U.S. economy has been gaining steam, Federal Reserve speakers on Wednesday downplayed the risks of higher inflation.

Those statements reinforced “the lower-for-longer mentality with regards to interest rates,” making the greenback less appealing, said Neil Jones, head of FX sales at Mizuho.

The safehaven U.S. dollar was last down 0.31% at 91.977 against a basket of peer currencies.

“What we’ve seen early in New York is a little bit of back-and-forth gyrations, just because of the Bank of England meeting,” said Erik Bregar, director and head of FX strategy at the Exchange Bank of Canada.

The Bank of England said it would slow the pace of its bond-buying as it sharply increased its forecast for Britain’s economic growth this year after its coronavirus slump, but it stressed it was not tightening monetary policy.

“They kept their QE target in place but they said they are going to reduce the weekly pace of purchases, but that’s not a signal and so sterling has kind of gone up and down and done nothing at the end of the day,” Bregar said.

The pound was last down 0.08% against the weaker dollar at $1.3900 .

The euro was up 0.47% versus the dollar at $1.2061 , and up 0.65% against the pound, at 86.88 pence per euro.

Investors were also paying attention to elections in Scotland that could herald a political showdown over a new independence referendum.

The Australian dollar fell sharply overnight when China said it would stop its economic dialogue with Australia, but the currency had recovered to trade close to flat on the day as European markets opened.

The Aussie was up 0.1% versus the U.S. dollar at 0.77515 at 1028 GMT, having hit as low of 0.7701 overnight.

The New Zealand dollar also dropped and was down 0.1% on the day.

“The announcements of the formal suspension of the economic dialogue between China and Australia should not have a lasting impact on markets given the already strained relationship between the two ahead of the event,” wrote ING strategists in a note to clients.

The Canadian dollar hit a three-and-a-half year high, helped by oil price gains and the Bank of Canada’s recent shift to more hawkish guidance.

In cryptocurrencies, ether traded around $3,500 after reaching a record high of $3,559.97 on Tuesday, skyrocketing nearly 800% this month.

Bitcoin declined 0.2% to $57,392.75.

The meme-based virtual currency Dogecoin soared on Wednesday to an all-time high, extending its 2021 rally to become the fourth-biggest digital coin.

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