Connect with us

Forex

EURGBP Weekly Outlook October 30 – November 3

Published

on

pound
  • EURGBP Weekly Outlook October 30 – November 3

Since peaking at 0.9305 in August, this pair has lost 477 pips and will close this month as a bearish pin bar. Indicating increase in selling pressure following the surge in UK’s headline inflation to 3 percent. Higher than the Bank of England’s 2 percent target.

This, increase in price pressures prompt the market to price in higher rate increase from the Bank of England in November, which subsequently strengthens the Pound against the Euro common currency.

Again, while the U.K. key economic sectors have started showing signs of slowing down due to the ongoing Brexit negotiation. The much stronger Euro-area is facing growing uncertainty with the Spain-Catalonia independence and weak inflation rate.

This is one of the reasons, the Euro plunged against G10 currencies last week after the European Central Bank left interest rate at zero percent.

EURGBP Weekly Outlook October 30 – November 3

However, with the Bank of England due to raise rates on Thursday, this pair could well be heading below the 0.8717 support level. Especially with the ECB refusal to raise rates just yet and reiterated that high foreign exchange rate is hurting productivity and subduing prices.

Therefore, as previously explained in September. I will expect this pair to close below the 0.8717 targets this week and a sustained break of that support level, depending on the voting numbers, to further open up 0.8557 targets in days to come.

Since the EURGBP called the top on August 29, this pair has plunged by 192 pips. However, last week, this pair closed below the 20-day moving average for the first time since July 14. A sign of Pound resilience and ECB monetary policy stance. Therefore, if consumer prices due on Tuesday shows inflation rises from the current 2.6 percent to the projected 2.8 percent, the Bank of England stance on interest rate hike is likely to change as escalating inflation rate is predicted to force the apex bank to raise rates regardless of the Brexit outcome. If happened, it will boost the Pound temporarily. An excerpt from forex weekly outlook of September 11-15.

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.

Continue Reading
Comments

Naira

Nigeria Hits Historic High as Currency in Circulation Surges to N3.69 Trillion

Published

on

naira

Nigeria’s currency in circulation surged to a historic high of N3.69 trillion, according to data released by the Central Bank of Nigeria (CBN).

This figure represents an increase of N43.07 billion or 1.18 percent from the total of N3.65 trillion reported in January 2024 and a 13.64 percent year-on-year rise from N3.25 trillion reported in February 2023.

Currency in circulation encompasses the physical cash, including paper notes and coins, actively used in transactions between consumers and businesses within the country.

The latest statistics indicate a considerable uptick in the availability of cash within the Nigerian economy.

The surge in currency supply comes amidst lingering concerns over a potential cash crunch following the monetary policy adjustments by the CBN, particularly the aggressive tightening stance of the Monetary Policy Committee (MPC).

Analysts attribute this spike to various factors, including the fear factor stemming from the cash crunch experienced in 2023 and lingering uncertainties surrounding the administration of physical currency.

Despite the surge in currency in circulation, Nigeria’s economic growth remains sluggish, with projections indicating growth rates of around 2.9 percent to 3.1 percent for 2024.

Also, inflation remains a significant concern, with the headline inflation rate climbing to 31.70 percent in February 2024 from 29.9 percent reported in January 2024, according to data from the National Bureau of Statistics (NBS).

The CBN’s proactive approach to monetary policy, including a historic increase in the monetary policy rate (MPR) to 24.75 percent, underscores the central bank’s commitment to addressing economic challenges and fostering stability amidst persistent pressures.

Continue Reading

Naira

Nigerian Naira Surges to N1,350 per Dollar in Parallel Market

Published

on

New Naira notes

The Nigerian Naira has appreciated to N1,350 per dollar in the parallel market, a significant gain from its previous rate of N1,430 per dollar just a day earlier.

Similarly, in the Nigerian Foreign Exchange Market (NAFEM), the naira strengthened to N1,382.95 per dollar, indicating an upward trend across key forex segments.

Data from FMDQ revealed that the indicative exchange rate for NAFEM fell to N1,382.95 per dollar from N1,408.04 per dollar on the previous day, representing a gain of N25.09 for the naira.

This surge in the naira’s value has widened the margin between the parallel market rate and NAFEM to N32.95 per dollar from N21.96 per dollar previously.

Analysts attribute this impressive surge to recent foreign exchange reforms implemented by the Central Bank of Nigeria (CBN).

These reforms, including the consolidation of exchange rate windows and liberalization of the FX market, have contributed to bolstering the naira’s strength against the dollar.

The CBN’s proactive measures aim to promote stability, transparency, and liquidity in the foreign exchange market, fostering confidence among investors and strengthening the national currency.

Continue Reading

Forex

CBN Governor Reveals $2.4 Billion Forex Forwards Under Investigation

Published

on

Naira Exchange Rates - Investors King

Governor Yemi Cardoso of the Central Bank of Nigeria (CBN) disclosed that law enforcement agencies are currently investigating foreign exchange forwards valued at $2.4 billion.

This announcement came in the wake of the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, March 26.

Governor Cardoso shed light on the meticulous forensic audit conducted on these transactions, which uncovered numerous discrepancies, rendering them ineligible for payment.

The CBN, while settling certain tranches of FX backlog, encountered transactions riddled with issues concerning their authenticity.

To address these concerns, Deloitte management consultants were enlisted to conduct a comprehensive forensic analysis spanning several months.

The audit revealed a multitude of irregularities, including allocations disbursed without corresponding requests, lack of proper documentation, and instances of outright illegality.

Cardoso emphasized the gravity of the situation, stating, “We refused to validate them because, apart from the fact that documentation was not satisfactory in many cases, they were outright illegal.”

He underscored the commitment of law enforcement agencies to investigate these transactions thoroughly.

Despite concerns about potential backlogs among stakeholders, Cardoso assured that the market remains open and transparent for addressing any outstanding contractual obligations.

The CBN has diligently verified and settled recognized backlogs of forward transactions.

This revelation comes at a critical juncture as Nigeria grapples with economic challenges, including inflationary pressures.

The MPC’s decision to raise the benchmark interest rate to 24.75 percent reflects efforts to stabilize prices and restore the purchasing power of the average Nigerian.

As investigations unfold and regulatory scrutiny intensifies, the CBN’s commitment to transparency and financial integrity will be closely monitored by stakeholders across the nation.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending