Forex

Aussie Bulls Short Kiwi as RBNZ Talks Tough Before Election

Published

7 years ago

August 11, 2017

Aussie Bulls Short Kiwi as RBNZ Talks Tough Before Election

As the Aussie falters in its rally against the greenback, bulls may find a better bet by backing it against the New Zealand dollar.

The Aussie may advance this year to NZ$1.15, a level last seen in 2013, as the Reserve Bank of Australia will probably raise rates before its counterpart as the larger economy proves to be more resilient, according to Eaton Vance Corp., which oversees about $395 billion. At the same time, the kiwi is coming under pressure as the Reserve Bank of New Zealand took a tougher tone on the currency on Thursday, a first step toward possible intervention.

“RBA will continue to act more hawkishly than the market expects, and RBNZ more dovishly,” said Eric Stein, Boston-based co-director of global fixed income at Eaton Vance. “The Australian economy is outperforming the New Zealand economy from a cyclical perspective.”

As New Zealand tussles with a slowing housing market and weaker-than-expected inflation, Australia has benefited from a surge in the prices of iron ore, its biggest export earner, and improving business confidence. RBA’s Governor Philip Lowe said on Friday the central bank is prepared to intervene only in “pretty extreme” situations, highlighting the different approaches taken by the two monetary authorities.

“Where we do see some value in playing rising intervention risk in the New Zealand dollar is by pairing it with the Aussie,” Adam Cole, chief currency strategist at Royal Bank of Canada, wrote in a report Friday. “The RBNZ’s history of currency management and its specific mandate for FX intervention contrast strongly with the RBA’s hands off approach to FX and is another reason why the two-month trend higher in Aussie-kiwi could extend further.”

Australia’s dollar has gained more than 4 percent against the kiwi to around NZ$1.0803 in Sydney Friday, since touching a five-month low on June 26. The Aussie has lost 1.9 percent against the U.S. dollar this month after surging as much as 10 percent from a May low.

The kiwi could also be buffeted by an upset in the general election in September, with approval for new opposition leader Jacinda Ardern gathering pace. The first major poll since she was chosen showed that support rose 9 points to 33.1 percent.

The Aussie will probably climb above NZ$1.10 before the Sept. 23 election, according to Keith Dack, a hedge-fund manager who has more than 30 years of trading experience. “The election in New Zealand has taken on a new dimension with Labour changing leadership,” said Dack, a senior portfolio manager at Kit Trading Fund in Singapore.

No party has won an outright majority since New Zealand introduced proportional representation in 1996, and governments are formed with the support of smaller partners.

New Zealand’s bond yield premium over Australia narrowed this week to about 17 basis points, the least since 2013, even as swaps traders bet that policy makers in both countries will keep rates on hold until August 2018.

While the RBA has also warned that a stronger currency will weigh on growth, an improving economy spurred the central bank this month to bring forward its projection for underlying inflation to reach around 2 percent to the second half of 2017.

Leveraged funds increased their bullish Aussie wagers in the week ended Aug. 1 to 60,601 contracts, the most since 2013. They trimmed kiwi net-long positions to 36,234 from as high as 36,906 in mid-July, which was a record in data compiled by Bloomberg starting in 2006.

The Aussie “looks cheap historically” against the kiwi, said Greg Gibbs, founder of Amplifying Global FX Capital in Breckenridge, Colorado, citing Australia’s strong external position, commodity prices and activity indicators. While Australia’s housing market is holding up well, New Zealand’s is cooling, and the smaller neighbor could be heading for a more unstable coalition government next month, he said.

“I do not see NZ$1.10 as a stretch,” 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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Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Published

3 days ago

May 17, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight improvement in the Naira exchange rate 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: ₦1,540
Selling Rate: ₦1,530

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

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

Published

3 days ago

May 17, 2024

Samed Olukoya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Published

4 days ago

May 16, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 2024.

This indicates a decline in the Naira exchange rate compared to the current 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.