Forex

Forex Weekly Outlook July 31- August 4

Published

7 years ago

July 30, 2017

Forex Weekly Outlook July 31- August 4

The US economic data showed the economy is healthy and expanded 2.6 percent in the second quarter. However, the US dollar dipped against most currencies, mainly because of the ongoing political tussle in the US and North Korea successful test of an ICBM capable of delivering a nuclear warhead to the US.

Again, while the Federal Open Market Committee (FOMC) announced its readiness to commence balance sheet normalization as soon as October, it also voiced its concern on weak inflation rate and the need for the apex bank to move gradually as previously stated. This further cast doubt on the widely expected rates decision by both investors and the markets.

However, the weak US dollar boosted exports to 4.1 percent in the second quarter, while consumer spending surged to 2.8 percent. Riding on solid job data and steady wage growth. Suggesting that the weak US dollar is aiding businesses –especially the manufacturing sector. A move most experts believed could continue to support the sector if Trump’s proposed tax cut failed.

In Australia, the Aussie dollar dropped slightly after data showed inflation rate rose 0.2 percent in the second quarter, down from 0.5 percent recorded in the first quarter. Signaling that despite the surge in the Aussie dollar value, the Reserve Bank of Australia, RBA, would not be raising rate soon.

This was after the RBA Governor Philip Lowe’s said the weak consumer prices was due to slow growth in wages. Even though unemployment rate was at a record low, wage growth has been on the decline alongside future expectations. Dragging down household consumptions as data showed households revised down their expectations of future income growth. This is the slowest wage growth since 1997.

In the UK, the International Monetary Fund revised down UK’s economic growth projection for 2017 to 1.7 percent, citing rising inflation rate and increased headwinds. Likewise, consumer confidence plunged to post Brexit low. Suggesting consumers are starting to doubt future growth amid Brexit.

In Canada, the economy expanded by 0.6 percent, up from 0.2 percent. However, the Canadian dollar has struggled to sustain its Trump’s rally, even with a surge in its manufacturing activities and a healthy labour market. Indicating that the uncertainty in the global oil market and US business atmosphere is weighing on Canadian dollar outlook.

This week, USDCAD and GBPCAD top my list.

USDCAD

After our first target was hit last week, this pair continues its bearish run breaking a two-year support level. This sustained break would attract more sellers, especially after data revealed the Canadian economy expanded better than projected.

Past week quote; Technically, the bearish flag pattern started in Jan 2016 signifies bearish breakout after closing below 1.3142 three weeks ago but affirmed bearish continuation following a sustained break of 1.2849 support level last week. Therefore, this week I will be expecting USDCAD to sustain current bearish move with 1.2494 as the first target. A sustained break of 1.2494 support levels should open up 1.2217.

Therefore, this week I will be adding to my sell order for 1.2217 targets.

GBPCAD

Since I mentioned this pair three weeks ago, it has plunged by 248 pips. Hitting our target 1 and 2.

However, with the growing weak business confidence in the U.K and low new investments. This pair is expected to continue its downward trend as long as 1.6497 resistance holds.

Past week quote; This is because the U.K. economy has started slowing down as the political uncertainty in the region worsen after Theresa May failed to win majority votes in June.

On the other hand, the Canadian dollar gained from growing labor market and improving manufacturing sector.

Therefore, I will be looking to sell for 1.6209 targets.

Up Next

Naira Closes Lower Despite Intervention

Don't Miss

CBN Sells $462m to Boost Forex Market

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.

Comments

Forex

Yen Hits 34-Year Low Against Dollar Despite Bank of Japan’s Inaction

Published

1 hour ago

April 26, 2024

Samed Olukoya

The Japanese yen plummeted to a 34-year low against the US dollar, sending shockwaves through global financial markets.

Despite mounting pressure and speculation, the Bank of Japan (BOJ) chose to maintain its key interest rate.

The yen’s relentless slide, extending to 0.7% to 156.66 against the dollar, underscores deep concerns about Japan’s economic stability and the efficacy of its monetary policies.

BOJ Governor Kazuo Ueda’s remarks at a post-meeting news conference did little to assuage fears as he acknowledged the impact of foreign exchange dynamics on inflation but downplayed the yen’s influence on underlying prices.

Investors, already on edge due to the yen’s dismal performance this year, are now bracing for further volatility amid speculation of imminent intervention by Japanese authorities.

The absence of decisive action from the BOJ has heightened uncertainty, with concerns looming over the potential repercussions of a prolonged yen depreciation.

The implications of the yen’s decline extend far beyond Japan’s borders, reverberating across global markets. The currency’s status as the worst-performing among major currencies in the Group of Ten (G-10) underscores its significance in the international financial landscape.

Policymakers have issued repeated warnings against excessive depreciation, signaling a commitment to intervene if necessary to safeguard economic stability.

Finance Minister Shunichi Suzuki reiterated the government’s readiness to respond to foreign exchange fluctuations, emphasizing the need for vigilance in the face of market volatility.

However, the lack of concrete action from Japanese authorities has left investors grappling with uncertainty, unsure of the yen’s trajectory in the days to come.

Market analysts warn of the potential for further downside risk, particularly in light of upcoming economic data releases and the prospect of thin trading volumes due to public holidays in Japan.

The absence of coordinated intervention efforts and a clear policy stance only exacerbates concerns, fueling speculation about the yen’s future trajectory.

The yen’s current predicament evokes memories of past episodes of currency turmoil, prompting comparisons to Japan’s intervention in 2022 when the currency experienced a similar downward spiral.

The prospect of history repeating itself looms large, as market participants weigh the possibility of intervention against the backdrop of an increasingly volatile global economy.

As Japan grapples with the yen’s precipitous decline, the stakes have never been higher for policymakers tasked with restoring stability to the currency markets. With the world watching closely, the fate of the yen hangs in the balance, poised between intervention and inertia in the face of unprecedented challenges.

Naira

Dollar to Naira Black Market Today, April 25th, 2024

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

1 day ago

April 25, 2024

Samed Olukoya

Naira to Dollar Exchange- Investors King Rate - Investors King

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 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 N1,260 and sell it at N1,250 on Wednesday, April 24th, 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.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,300
Selling Rate: N1,290

Naira

Dollar to Naira Black Market Today, April 24th, 2024

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

2 days ago

April 24, 2024

Samed Olukoya

As of April 24th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,260 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 N1,250 and sell it at N1,240 on Tuesday, April 23rd, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly 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.