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Dollar Drops as Traders Prepare for Inflation Data

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United States Dollar - Investors King Ltd

The dollar slipped on Monday towards a three-week low as Treasury yields traded near recent lows and traders awaited crucial U.S. inflation and retail sales data in coming days.

Elsewhere, it was a quiet start to a data-heavy week for foreign exchange markets. The euro climbed back above $1.19 while the British pound rebounded from a two-month low.

The dollar’s performance has been tied to U.S. Treasury yields for most of 2021, after concern about rising inflation in the United States and a stimulus-fueled economic rebound triggered a jump in Treasury yields in February.

A fall in U.S. yields last week triggered the worst week for the dollar in 2021. With yields inching lower on Monday, it was back under pressure.

Federal Reserve Chairman Jerome Powell said in a U.S. media interview released on Sunday that the U.S. economy was at “an inflection point” and looked set for a strong rebound in the coming months, but he also warned of risks stemming from a hasty re-opening.

Investors are now waiting for U.S. March inflation data due on Tuesday.

“We are set to see the first evidence of the much anticipated surge in inflation that is widely expected through the coming months as base effects from a year ago begin to take effect as the sharp declines post-COVID start to fall out of the annual calculations,” MUFG analysts said.

They said the dollar’s fortunes could well “remain linked to 10-year yields”.

The benchmark 10-year Treasury yield was at 1.664% after dropping to as low as 1.6170% last week. It had surged to a more than a one-year high of 1.7760% on March 30.

The dollar index, which measures the U.S. currency against a basket of currencies, weakened 0.2% to 92.03. The euro initially dropped but later recovered and was up 0.1% to $1.1915.

Bitcoin traded above $60,000, closing the gap to its record high.

Against the pound the dollar initially gained before reversing course. The British currency was last up 0.5% at $1.3763 after briefly touching a two-month low of $1.3669 as traders cheered the latest phase of the government’s economic re-opening plan.

The dollar fell 0.3% to 109.33 yen versus the Japanese currency.

U.S. dollar net short positions have fallen to their lowest in nearly three years, according to data published on Friday.

ING analysts noted that speculators had cut their net short dollar positions for the 12th consecutive week, which could prove a headwind for further dollar gains.

“At this stage, the dollar has lost all its positioning “advantage”, having a neutral speculative positioning, which suggests we should no longer see dollar rallies against most G10 currencies exacerbated by the unwinding of USD shorts,” they wrote.

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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NAFEM Dollar Sales Plummet to $84.1m, Naira Dips to N1,537/$

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U.S dollar - Investors King

On Friday, the Nigeria Autonomous Foreign Exchange Market (NAFEM) witnessed a substantial decline in dollar sales, plummeting to $84.1 million from the previous day’s $331.1 million, representing a 74% drop.

Concurrently, the value of the Nigerian naira depreciated, falling to N1,537 against the US dollar compared to N1,498 recorded in the preceding trading session.

Data sourced from the FMDQ Security Exchange revealed that the drastic reduction in forex turnover at NAFEM reflects dwindling activities in the foreign exchange market.

Despite the participation of entities such as commercial banks, the Central Bank of Nigeria (CBN), oil firms, and multinationals in dollar sales, the overall transaction volume experienced a notable contraction.

Throughout the week, the forex supply at NAFEM exhibited fluctuations. It commenced with a modest supply of $116.11 million on Monday, surged to $381.92 million on Tuesday, but regressed to $117.87 million by Wednesday.

Thursday witnessed a slight recovery with supply climbing to $336.11 million.

Market analysts attributed the depreciation of the naira to intensified demand for dollars driven by speculation and individuals seeking foreign currency for various purposes including business, tourism, education, and healthcare.

The widening gap between official and parallel market rates raises concerns about potential round-tripping activities.

Despite recent CBN interventions and policy directives aimed at enhancing forex supply and curbing malpractices, challenges persist in the forex market.

The evolving dynamics underscore the need for sustained efforts to stabilize the currency and foster confidence in Nigeria’s financial ecosystem. As stakeholders monitor market developments, attention remains focused on implementing effective measures to mitigate forex volatility and sustain economic stability.

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Dollar to Naira Black Market Exchange Rate Today 19th December 2023

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New Naira notes

What is the Dollar to Naira exchange rate at the parallel market, known as the black market (Abokifx) today? As of December 19th, 2023, the dollar to naira exchange rate is 1 USD to 1235 NGN at the black market.

This means that for every one US dollar, you can exchange it for ₦1235, Investors King reports.

This digital business news platform has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

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

This rate is subject to change depending on a variety of factors including global economic trends, political developments, and market fluctuations. However, you can buy and sell 1 USD at ₦1235 and ₦1230 as of the time of writing today.

What is the current exchange rate of the dollar to naira in the black market today?

According to Investors King, as of the time this report was filed, a dollar can be purchased at the Lagos parallel market (black market) for ₦1235 and sold for ₦1230.

Exchange Rate of Dollar To Naira in Black Market Today?

Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Selling Rate 1230
Buying Rate 1235

Central Bank of Nigeria (CBN) Naira Exchange Rates for Banks

Investors King understands that although the dollar to naira opened at N1235 per $1 in the parallel market today, the Central Bank of Nigeria (CBN) does not acknowledge the parallel market, also referred to as the black market. The CBN has instructed individuals in need of forex to approach their bank as the I&E window is the sole recognized exchange.

On Tuesday, December 19th, 2023, individuals in the black market purchased one US dollar for N1230 and sold it for N1235. This shows that the value of the Naira declined when compared to Monday, December 11th, 2023 when the local currency was exchanged at N1190 to a Dollar and a Dollar was purchased at N1180.

To stay informed about the dollar to naira exchange rate, there are several reliable sources that you can turn to. Here are some tips for staying up-to-date:

  • Check the Central Bank of Nigeria’s website: The CBN is responsible for regulating the country’s monetary policy and is a reliable source for the latest exchange rates. You can check their website regularly for updates.
  • Follow financial news outlets: Financial news outlets such as Investors King, Bloomberg, Reuters, and CNBC provide regular updates on the global currency markets, including the dollar to naira exchange rate.
  • Use online currency converters: There are a number of online currency converters that allow you to quickly and easily check the exchange rate between the dollar and the naira.
  • Follow social media accounts of financial experts: Following social media accounts of financial experts such as analysts, economists, and financial advisors can give you valuable insights into the latest trends in the currency markets.

By staying informed about the dollar-to-naira exchange rate, you can make informed decisions when buying or selling foreign currencies. Whether you are a business owner looking to trade in foreign currencies or an individual looking to invest in the currency markets, knowledge of the latest exchange rates is key to success. Keep these tips in mind and stay informed about the latest trends in the global currency markets.

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Dollar Sees Uptick, But November Nears Steepest Monthly Decline in a Year

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US Dollar - Investorsking.com

The dollar made modest gains on Thursday, but it still faces the prospect of marking its most significant monthly decline in a year.

This trend is largely attributed to heightened speculation that the Federal Reserve will refrain from further rate hikes, a sentiment reinforced ahead of a crucial inflation report scheduled for later in the day.

The dollar index, gauging the U.S. currency against six counterparts, managed to climb 0.35% to 103.18, rebounding from Wednesday’s low of 102.46—the weakest level since August 11.

Despite this slight recovery, the index is on track to conclude November with a 3.3% slump, fueled by mounting expectations of a Fed interest rate cut in the first half of 2024.

Mohamad Al-Saraf, Associate of FX and Rates Strategy at Danske Bank, noted, “The key drivers in November for the dollar weakness have been the benign inflation data and the loosening signs of the labor market.”

Market focus intensifies as investors await the crucial Personal Consumption Expenditure (PCE) price index, the Fed’s targeted measure of inflation, scheduled for release on Thursday.

Christopher Wong, Currency Strategist at OCBC, emphasized that the PCE data would offer insights into the persistence of the disinflation trend.

As U.S. rates futures markets price in over 100 basis points of rate cuts for next year, commencing in May, the dollar’s path remains contingent on inflationary signals and cues from Federal Reserve Chair Jerome Powell’s speech on Friday.

The global economic landscape, underscored by weaker data in Germany, Spain, and France, amplifies the volatility in currency markets, leaving investors closely monitoring central bank responses.

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