Forex

Caution Reigns as U.S. Politics Takes Center Stage

Published

7 years ago

May 17, 2017

Caution Reigns as U.S. Politics Takes Center Stage

Growing concerns over the turmoil engulfing President Donald Trump’s administration weighed on risk appetite, boosting the yen and gold and sending stocks lower.

S&P 500 Index futures declined with European and Asian equities on reports that Trump asked FBI Director James Comey to drop an investigation into former National Security Adviser Michael Flynn. The dollar was already in retreat after a report that the U.S. president shared terrorism intelligence with Russian officials, an action he has since defended. The Bloomberg Dollar Spot Index dropped for a sixth day, crude extended losses and volatility indexes climbed.

“If he’s preoccupied defending himself and if it goes a lot further, then any hope of his legislative agenda coming to the fore is going to be reduced,” John Stopford, the London-based head of fixed-income at Investec Asset Management Ltd., said in an interview with Bloomberg TV.

“Clearly at the margin it’s a negative. At the moment there’s a classic environment for yields to rally a bit further and for the dollar to sell off.”

After a protracted period of dormancy, financial markets are beginning to react to developments in Washington in a more unified manner. With stock and bond volatility muted, investors have looked for a clearer reaction to the political din in currency markets. The U.S. currency now sits at its lowest level since the day of Trump’s shock win, a retracement some blame on perceptions his legislative agenda faces deeper challenges.

Even here, though, traders have been divided on what is moving the U.S. currency, with some seeing catalysts beyond politics. One explanation for the retreat might be weaker-than-expected readings on U.S. inflation and economic growth in the past month, data that have coincided with easing perceptions of political and economic risks in Europe. While traders continue to price in two interest rate increases by the Federal Reserve this year, speculation is rising that European counterparts are preparing to withdraw their own stimulus measures.

“The only political calibration the Fed has is how much Trumponomics we were going to get that they can’t see yet,” Neil Dwane, global strategist at Allianz Global Investors, said in an interview with Bloomberg TV. Even so, U.S. policymakers “are in the mindset to raise as long as the markets are prepared for it,” he said.

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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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Forex

Investors in Turmoil as Zimbabwe’s New Currency Wipes Out 330% Stock Market Gain

Published

2 hours ago

April 23, 2024

Samed Olukoya

Zimbabwe’s financial landscape has been rattled by the introduction of the new currency ZiG, spelling trouble for investors who had sought refuge in the stock market amidst economic turmoil.

The Zimbabwe Stock Exchange (ZSE) All Share Index has plummeted by 99.95% since the rollout of ZiG on April 5. This has erased more than 330% gain recorded earlier this year.

The introduction of ZiG, short for Zimbabwe Gold, was intended to provide stability to the country’s currency and succeed the embattled Zimbabwean dollar, which had already lost 80% of its value in 2024 alone.

However, instead of instilling confidence, the new currency has sent shockwaves through the stock market, leaving investors grappling with the fallout.

Prior to the currency conversion, investors had flocked to the stock market as a safe haven amid the Zimbabwean dollar’s depreciation and soaring inflation rates, which had reached a seven-month high of 55.3% in March.

However, the abrupt introduction of ZiG has reversed their fortunes, plunging share prices and trading volumes as the market grapples with the transition.

Justin Bgoni, the CEO of the Zimbabwe Stock Exchange, attributed the market’s poor performance to a combination of factors, including delays in currency conversion by financial institutions and tight liquidity conditions.

He noted that investors were also hesitant and uncertain about the value of assets denominated in ZiG terms, further exacerbating the situation.

The conversion of share prices from the old currency to ZiG at a swap rate of 1 ZiG to 2,498 Zimbabwean dollars has led to a significant decline in trading volumes and revenues for brokerage firms.

Lloyd Mlotshwa, head of research at Harare-based brokerage IH Securities, highlighted that brokerages have experienced a substantial hit to earnings, with some seeing their revenues drop by at least 50%.

Stockbrokers in the capital, Harare, described the current market conditions as “a painful early winter,” marked by limited trading volumes and uncertainty. They anticipate broader ramifications across the stock market architecture, affecting not only stockbrokers but also custodians, government taxes, and the Zimbabwe Stock Exchange itself.

Enock Rukarwa, a research and investment consultant at FBC Securities, said stockbroking boutiques need to adapt their business models to mitigate the impact on commission income and pointed out that the majority of the economy still transacting in US dollars.

He suggested that stockbroking boutiques need to adapt their business models to mitigate the impact on commission income.

Imara Asset Management, Zimbabwe’s largest independent brokerage overseeing $100 million in assets, warned of further upheaval in the coming months as share prices adjusted to ZiG.

The company’s CEO and CIO, John Legat and Shelton Sibanda, criticized the decision to adopt ZiG instead of US dollars, considering that many listed businesses operate in USD.

Naira

Dollar to Naira Black Market Today, April 23rd, 2024

Published

3 hours ago

April 23, 2024

Samed Olukoya

As of April 23rd, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,250 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,290 and sell it at N1,280 on Monday, April 22nd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate improved when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,250
Selling Rate: N1,240

Naira

Dollar to Naira Black Market Today, April 22nd, 2024

As of April 22nd, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,290 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

1 day ago

April 22, 2024

Samed Olukoya

As of April 22nd, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,290 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,100 and sell it at N1,090 on Friday, April 19th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.