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Forex Weekly Outlook November 20-24

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  • Forex Weekly Outlook November 20-24

The US economy continued to churn out strong economic fundamentals but not enough to sustain dollar attractiveness amid rising tax concern. Retail sales rose 0.2 percent in October,  indicating consumer spending remains healthy even with less desirable wage growth.

In the U.K, the economy has started showing signs of weakness following Prime Minister Theresa May failure to reach an agreement with the European Union. Retail sales dropped 0.3 percent year-on-year in October, while wage growth edge higher slightly to 2.2 percent in the third quarter. Still, this is below the 3 percent inflation rate that is eroding buying power.

In the Euro-area, the economy grew at 0.6 percent with consumer prices remaining steady at 1.4
percent, same as previous numbers.

This week, we will be reviewing six currency pairs as listed below;

AUDUSD

Australia created fewer jobs than expected in October but unemployment rate improved to 5.4 percent. Meaning, drop in the participation rate was what plunged unemployment rate to more than 4-year low and not state of the economy.

As previously stated, the Australian economy is struggling with weak wage growth and low inflation rate, this we expect to continue into 2018. Especially, with retailers cutting prices to boost demand and housing debt rising.AUDUSDDaily

Therefore, this week we remain bearish on AUDUSD and expect the success of House Republicans on tax reform to further aid AUDUSD towards our third target at 0.7505.

NZDUSD

Last week, data shows New Zealand’s producer price index, both input and output, rose less than expected in the third quarter. Suggesting that price pressures are still low and likely to impede the Reserve Bank of New Zealand from raising rates in 2018.

Even though inflation rate was better than expected in the third quarter, 1.9 percent year-on-year. It was just above the mid of 1-3 percent projected by the apex bank. This is partly due to the decline in global dairy prices and weak exports.Forex Weekly Outlook November 20-24

Again, while this pair rebounded after hitting our first target at 0.6892, the weak economic outlook due to change of government and poor economic fundamentals continued to hurt the Kiwi attractiveness against most currencies. Therefore, after establishing a bearish evening star below the ascending line, as shown above, the NZDUSD has reaffirmed bearish continuation. This week, we remain bearish on NZDUSD with 0.6716 (target 2) as the target.

NZDJPY

The weak producer prices aided our NZDJPY projection last week but after NZDJPY hit our second target at 76.25 the pair slightly rebounded to close above that support level.  While we are bearish on NZDJPY, we need a sustained break of 76.25 support level to validate bearish continuation for 74.47 targets.

Forex Weekly Outlook November 20-24

AUDJPY

As stated in the previous analysis, the Australian dollar is overpriced but the weak economic data and uncertainty surrounding the economic growth ahead of China’s credit control and steel reduction policies are key factors hurting Aussie dollar attractiveness against G10 currencies.Forex Weekly Outlook November 20-24After closing below our first target at 86.34 and below the ascending trendline, the AUDJPY affirmed bearish continuation towards 82.20 as shown above but a sustained break of 84.74 is needed to further validate downside movement. This week, we will be looking to add to our position below 84.74 support.

AUDNZD

While this pair rebounded last week, we do not see its sustainability going forward. Therefore, we attributed the upsurge in price to the weak producer prices data released on Friday and expect the market to attain a ‘balance’ next week. Especially, with the weak Australian economic outlook and the 1.1111 resistance level that doubled as 20-day moving average still intact.Forex Weekly Outlook November 20-24

Hence, we remain bearish on AUDNZD and expect a close below the ascending trendline and 1.1000 support level to reinforce sellers’ interest and push price towards 1.0922 as previously stated.

 GBPAUD

Since we first mentioned this pair buy opportunity in September, it has gained significantly above our 1.6539 targets. However, after readjusting our psychological levels to accommodate the Bank of England’s new monetary policy stance, we think GBPAUD is ready for the upside for two reasons. One, while the Australian dollar is overpriced, Pound Sterling is undervalued and has suffered tremendously because of growing uncertainties surrounding Brexit. Two, the U.K. economic numbers remain positive and resilient even with the growing political and economic issues in the nation, while the reverse is the case for Australian economic numbers.

Similarly, between September 15 and November 17, this pair has gained 1080 pips to close at 1.7466 last week. That is a significant move for the Pound Sterling with all the economic uncertainties. Also, we believe a close above the 1.7181 validated sustainable bullish move and as long as that level holds, we are bullish on GBPAUD with 1.7652 as the target.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Forex

Akinwumi Adesina Extols Africans in Diaspora on Cross-Border Remittance

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Akinwunmi Adesina - Investors King

African Development Bank (AfDB) President, Akinwumi Adeshina has extolled the tenacity and impacts of Africans in Diaspora on cross-border remittance.

According to the AfDB President, Africans in the diaspora are the continent’s largest financiers through their yearly remittances.

Speaking at an event organised by the Bank in collaboration with the African Union Commission, Adeshina noted that cross-border remittance into Africa is more than development assistance to the continent. 

Investors King earlier reported that remittance into Nigeria and other countries in the sub-Sahara Africa region hits $53 billion in 2022.

The AfDB President said, “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021. Yet official development assistance to Africa in 2021 was $35 billion, or 36% of the remittances from the diaspora”.

Adeshina added that Egypt and Nigeria are among the top-ten remittance recipients globally, with $31.5 billion and $19.2 billion, respectively in 2021. 

While speaking on the advantage of cross-border remittance to the African continent, the AfDB president noted that remittances have helped to meet financial, food, education, and health needs of many Africans, “it as well as serve as countercyclical sources of finance,” he said.

“The African diaspora has become the largest financier in Africa! And it is not debt, it is 100% gifts or grants, a new form of concessional financing that is the key for livelihood and security for millions of Africans” he added.

Similarly, Adeshina further positioned the need to eliminate premium charges on cross-border remittance into Africa. He noted that cross-border into Africa is twice what is it for South Asia.

He concluded that the Africans in diaspora can add more than remittance and investment, noting that they have skills, knowledge and know-how which can be needed for the development of the continent.

“They can help build world-class universities, and they can be mentors for the new generation of Africans,” he said. 

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eNaira

E-Naira Transaction Volume Rises to N5 Billion in November Amid Intensified Campaign

More Nigerians embrace eNaira wallet as CBN takes adoption campaign across the nation

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The Central Bank of Nigeria, (CBN) has disclosed that e-Naira transaction volume rose to a record N5 billion in the month of November following a series of campaigns initiated to encourage adoption.

Investors King had earlier reported how the e-Naira adoption team visited a number of parks in Abuja and the University of Lagos among other locations to drive the adoption of the digital currency. 

Speaking at the Second Edition of the Africa Cashless Payment Conference, CBN’s Director of Information and Technology, Hajiya Rakiya Mohammed noted that transaction on the e-naira platform does not attract any charges. 

She stated that Nigeria’s financial ecosystem is large to accommodate everyone.

Hajia Rakiya added that the e-Naira platform can be operated in any of Nigeria’s major local languages, stating that onboarding onto the e-Naira platform is a simple process. 

She further stressed that the primary goal of the e-naira is to reduce the amount of cash in circulation, thereby downsizing the cost of producing paper currency, increase in revenue and direct disbursement to citizens.

Meanwhile, the e-Naira circulation has reached N401.82 million as more Nigerians embraced the digital currency. 

It could be recalled that on October 25, 2021, CBN launched the e-Naira making Nigeria the first African country to have a digital currency. 

During the unveiling of the e-Naira in Abuja, President Muhammadu Buhari stated that the digital naira would increase remittances, foster cross-border trade, improve financial inclusion and enable the government to make welfare payments more easily.

On his part, the CBN Governor, Godwin Emefiele disclosed that the e-Naira offered Nigerians endless possibilities in using financial services. 

While admonishing more Nigerians to embrace the digital naira, Hajia Rakiya noted that “both banked and unbanked can use it, and it can be done through USSD *997#. We have integrated it with telecoms and NIBBS instant payments plus integration with money transfer operations so you can use e-naira for cross border”.

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Naira

CBN Will Redesign Naira Notes Every Five to Eight Years; Say Emefiele

The central bank will henceforth redesign the nation’s legal tender every five to eight years

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New Naira Notes

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the bank will henceforth redesign the nation’s legal tender every five to eight years.

The apex bank governor revealed at the unveiling of the new naira notes on Tuesday. 

Godwin Emefiele explained that the naira redesign is in line with global best practice noting that the naira needed to be redesigned and re-issued every five to eight years.

According to the CBN governor, previous administrations lacked the political will to approve the redesign of the naira notes. Stating that it is regrettable that the naira has not been redesigned for the past 19 years. 

“In the past, I have to confess that attempts by the CBN to redesign and re-issue the naira notes have been resisted. It is only President Muhammadu Buhari that has exhibited the courage to do so,” the CBN governor stated. 

Emefiele added that going forward, naira notes will be redesigned at intervals to address some peculiar issues. 

 “After today, the CBN will begin to redesign and reissue the naira every five to eight years,” he said. 

Investors King had earlier reported that President Muhammadu Buhari unveiled the redesigned naira notes at the Federal Executive Council (FEC) meeting today. 

Among those who joined the president with the unveiling include the CBN governor and the EFCC chairman.

Recall, in October, the CBN announced it will redesign the N200, N500 and N1,000 notes in line with its mandate.

Meanwhile, the CBN governor has disclosed that the new naira notes can not be counterfeited because of the features embedded in them. 

Similarly, he added that security agencies would be monitoring people making withdrawals at the counter to sniff out money laundering and unravel illegal usage. 

“The CBN has moved to a cashless economy. We will restrain the volume of cash someone will withdraw over the counter. We will follow up with the person’s data to know the reason for such withdrawal,” he concluded.

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