Forex

Forex Weekly Outlook March 13-17

Published

7 years ago

March 12, 2017

Forex Weekly Outlook March 13-17

If there is anything the US economic data confirmed last week, it was the Federal Reserve’s rate decision and the solid labour market. The economy added 235,000 jobs in February, following a 238,000 job in January. Making it the best back-to-back gain since July 2016.

The unemployment rate also improved to 4.7 percent from 4.8 percent recorded in January, indicating additional improvement in the participation rate which increased from 62.9 percent to 63 percent.

However, the wage growth was below the 0.3 percent projected by most economists, rising just 0.2 percent in February after January year-on-year wage growth was revised down from 2.9 percent to 2.8 percent. This further validated the Fed’s concerns regarding sustainability once the interest rate is increased. Therefore, clouding the potential of the U.S assets amid series of uncertainty emanating from the country.

Also, on a critical look into the report, about 26,000 jobs were lost in the retail sector of the economy in the same month. Meaning, the retail sector that formed the bulk of the services sector that constituted 70 percent of the entire American economy is not creating jobs, as retail owners are reportedly worried about the impact of the proposed border tax on their imports and subsequently profit margin. Therefore, if the Federal Reserve raise rate this week, the subsequent increase would depend on how well fiscal stimulus complement monetary adjustment in terms of job creation, wage growth and productivity. Putting the likelihood of the third rate hike this year in question.

In Euro-Area, the economy rose 0.4 percent in the final quarter of 2016. Boosting investors’ confidence to its highest level post-recession but with both household consumption and government spending surging 0.2 percent and 0.1 percent respectively, the ECB was forced to raise its growth forecast to 1.8 percent in 2017 and 1.7 percent in 2018.

Although, the European Central Bank president Mario Draghi has attributed the renewed confidence and growth in the region to surging commodity prices and argued that the underlying fundamentals remain weak. Economic experts believed the improvement in global economic outlook is aiding the region, but that the weak wages and rising inflation remain a concern.

In Canada, the economy added another 15,300 jobs in February, bringing the total jobs created in the past 12 months to 288,100 and unemployment rate to 6.6 percent from 6.8 percent.

Canadian strong job market has been supporting household spending, though there are worries around the quality of those jobs. The Bank of Canada has highlighted “subdued” wage growth and hours worked as evidence of continued lack in the country’s labor market, even with recent job gains.

Overall, the global economy is stronger in the first quarter of 2017 than what was obtained last year. But the uproar in the euro-area political sphere and uncertainty in the US continued to cast a shadow on both the financial markets and global economy.

This week NZDCAD, EURJPY, EURNZD and NZDJPY top my list.

NZDCAD

This pair has lost around 608 pips since peaking at 0.9923 price levels in November 2016. Confirming the renewed interest in the Canadian dollar after OPEC reached consensus and a more favourable bilateral trade deal with the US following a series of positive comments from Donald Trump since winning the US election.

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Also, the last 5-week candlesticks don’t just attests to downside pressure but correlate with the underlying fundamentals of the paired currencies and validated by the gravestone doji established two weeks ago. This week, I am bearish on this pair and will be looking to sell below 0.9298 for 0.9108 targets.

Last Week Cap

EURJPY

Since I mentioned this pair last week, it has gained 137 pips but still below our target of 124.18. Nevertheless, I expect the growing odds of the Fed raising rates and the eventual rates increase to impact the attractiveness of the Japanese yen and further aid this pair.

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Also, given continued growth and renewed confidence in the euro-area I remained bullish on this pair while monitoring both Netherland-Turkish and France political uprising.

EURNZD

This pair has gained about 322 pips since I mentioned it last week but was 63 pips short of our target (1.5469). While I remained bullish on this pair this week, it is advisable to adjust stop lost to lock-in part of the profit realized last week while leaving moderate room for price movement.

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NZDJPY

For the past three weeks, I have been mentioning this pair and its sell opportunities. Even though it was slower the other pairs but it was consistent and has given us 214 pips in total. However, last week it was 5 pips short of our first target at 78.83. This week, I remained bearish on this pair and will look to add to my position below 78.83 support levels.

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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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Forex

BDC Operators in Abuja Face EFCC Crackdown: Chaos Erupts in Wuse Zone 4

Published

20 hours ago

April 30, 2024

Samed Olukoya

The bustling streets of Wuse Zone 4 in Abuja transformed into a scene of chaos and apprehension as the Economic and Financial Crimes Commission (EFCC) conducted a surprise crackdown on Bureau De Change (BDC) operators.

The operation, which unfolded on Monday, sent shockwaves through the financial district, leaving traders and residents bewildered.

Eyewitnesses recounted scenes of pandemonium as EFCC agents descended upon the area, swiftly apprehending an undisclosed number of BDC operators.

The raid, which occurred around noon, disrupted normal trading activities and prompted fear among the local populace.

Speaking on condition of anonymity, BDC operators confirmed the raid, expressing dismay at the sudden turn of events.

“EFCC just raided the market, arresting many operators. They arrested some persons seen on the street and even pursued some persons to their offices. We are still looking for N30,000 or N50,000 to bail those arrested on Friday yet they came again today,” one trader lamented.

The crackdown comes as part of the EFCC’s concerted efforts to combat illicit financial activities and restore stability to the foreign exchange market.

Last Friday, the anti-graft agency announced the arrest of 34 suspected currency speculators for alleged involvement in foreign exchange fraud, signaling a firm stance against financial malpractice.

However, the EFCC’s actions have stirred controversy, with some questioning the efficacy of such raids in addressing underlying issues affecting the Nigerian currency.

Despite these efforts, the naira opened the week on a negative trajectory against the United States dollar, signaling potential challenges ahead.

At the official market on Monday, the naira witnessed a significant depreciation, trading at N1,419 against the dollar, representing a loss of N58 or 4.3% from the previous trading session.

The decline underscores the persistent demand for the greenback amid economic uncertainties.

Currency traders at the Zone 4 market reported heightened volatility, with the dollar trading at N1,340 per dollar, marking a notable increase from the weekend rate.

Amidst the turmoil, traders like Abubakar Taura navigated the fluctuating market, capitalizing on the volatility to secure profits.

Naira

Dollar to Naira Black Market Today, April 30th, 2024

As of April 30th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,340 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

21 hours ago

April 30, 2024

Samed Olukoya

As of April 30th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,340 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 N1,310 and sell it at N1,300 on Monday, April 29th, 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: N1,340
Selling Rate: N1,330

Forex

ABCON President Announces Blueprint for Unified Retail Forex Market

Published

2 days ago

April 29, 2024

Samed Olukoya

Naira Dollar Exchange Rate - Investors King

The President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, has revealed plans to establish a unified retail end forex market structure.

This strategic initiative seeks to address volatility and streamline operations across the Bureaux De Change (BDC) sub-sector.

Gwadabe outlined the objectives of ABCON’s blueprint and the need to integrate operators from various segments of the market.

Central to the plan is the inauguration of state chapters to facilitate coordination, integration, and administration of a united market structure.

ABCON intends to extend its automation policies and platforms to all BDC operators nationwide, upgrading its Business Process Platform to enhance efficiency and transparency.

The proposed unified retail end forex market will feature a centralized, democratized, and liberalized online real-time trading platform.

This innovation aims to provide market participants with greater accessibility and transparency while fostering regulatory compliance and government oversight.

Speaking on the vision for the unified market, Gwadabe highlighted the importance of collaboration with regulatory agencies, security operatives, and government bodies to ensure a secure and thriving forex market environment.

Gwadabe reiterated the benefits of a realistic and vibrant retail forex market, aligning with the Central Bank of Nigeria’s (CBN) objectives of achieving true price discovery for the naira and balancing international obligations.

Also, the unified market structure aims to provide market intelligence reports, enhance the image of BDCs, and stimulate employment generation.

Furthermore, ABCON’s initiative aims to combat the proliferation of unlicensed forex platforms by creating a transparent and competitive market environment. By digitizing retail forex transactions and ensuring regulatory compliance, the association aims to capture revenues for the government and curb illicit financial activities.

ABCON, as a self-regulatory body representing all CBN-licensed BDCs, acknowledges the importance of maintaining integrity and adherence to regulatory standards within the sector.