Forex

Forex Weekly Outlook July 17-21

Published

7 years ago

July 16, 2017

Forex Weekly Outlook July 17-21

The US dollar plunged against G-10 currencies after data signals the Federal Reserves might not raise rates for the third time this year.

This is because the retail sales fell 0.2 percent in June after declining by 0.1 percent in May. Suggesting that consumers were cautious about spending even with a healthy labour market.

Also, the consumer prices remain steady following a 0.1 percent decline in May. While the lackluster pricing is largely due to the drop in gasoline cost, the inflation rate is below Fed’s 2 percent target and differ Fed chair Yellen Janet’s statement that a healthy labour market would gradually filter through other sectors of the economy and boost wage growth while simultaneously bolstering inflation rate towards Federal Reserves’ target.

In Canada, the Bank of Canada raised overnight cash rate by 25 basis points to 0.75 percent, citing broad growth and strong labour market. This further boosted the loonie attractiveness against the US dollar to over a year high of 1.2648. According to the central bank, the Canadian economy remains robust with growth broadening across industries and regions. However, the bank estimated that real growth will moderate from 2.8 percent projected in 2017 to 2.0 percent in 2018 and 1.6 percent in 2019.

This Week, USDCAD, AUDJPY and EURCAD top my list.

USDCAD

The uncertainty surrounding the US rates hike and the political sphere continue to weigh on the US dollar attractiveness. While Canadian dollar was boosted by the Bank of Canada decision to raise overnight cash rate for the first time in 7 years, the economy remains healthy and projected to sustain current cash inflow for the remaining half of the year.

Technically, the bearish flag pattern started in Jan 2016 signifies bearish breakout after closing below 1.3142 three weeks ago but affirmed bearish continuation following a sustained break of 1.2849 support level last week. Therefore, this week I will be expecting USDCAD to sustain current bearish move with 1.2494 as the first target. A sustained break of 1.2494 support levels should open up 1.2217.

AUDJPY

The Australian dollar continues to gain against the Japanese Yen, bringing its total gain since June to 634 pips. This is 4 pips below 15-month high established during Donald Trump’s rally as shown below. Again, while the Australian economy is expected to strengthen amid improved business conditions and the surge in capacity utilisation, the Japanese Yen is weighed upon by almost zero inflation rate and weak wage growth.

Therefore, this week, I will expect a sustained gain above the 88.17 price levels to open up 90.32 targets. For two reasons, one the weak US economic data that cast doubt on rates hike bolstered Aussie dollar to a two year high against the dollar, meaning there is a surge in demand for the Aussie dollar, especially after the hawkish statement from the central bank.

Two, while Japanese Yen is partly affected by political uncertainty surrounding Prime Minister Shinzo Abe’s party lost in Tokyo, Australia remains free of a political conundrum.

EURCAD

While the Euro-single currency has sustained its gain against most currencies. It has failed to do the same against the Canadian dollar, losing 753 pips since peaking at 1.5256 in June.

Also, for the first time since April, the pair closed below 1.4602 last week and established a bearish pin bar candlestick to validate bearish continuation.

Therefore, if the EURCAD break 1.4444 support level, below the trendline as shown above. I will be looking to sell for 1.4398 targets and expect a break of that level to boost the EURCAD attractiveness towards 1.4172 support level, target 2.

Last Week Recap

CADJPY

Target 2 was hit last week, however, the volume of trade was low due to the growing uncertainty in the region, especially from the US, Canada’s largest trading partner.

This week, I remain bullish on this particular pair and will expect a sustained break of target 2 to open up target 3 as explained last week.

GBPCAD

Last week, this pair gave us 225 pips, hitting our target 1 at 1.6497 and was 2 pips short of our target 2, 1.6353, before rebounding to close above 1.6497 levels.

However, as long as price remains within the descending channel and below resistance level of 1.6704. I remain bearish on this pair and will be looking to sell at a better price.

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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

ABCON President Announces Blueprint for Unified Retail Forex Market

Published

13 hours 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.

Forex

Yen Hits 34-Year Low Against Dollar Despite Bank of Japan’s Inaction

Published

4 days ago

April 26, 2024

Samed Olukoya

The Japanese yen plummeted to a 34-year low against the US dollar, sending shockwaves through global financial markets.

Despite mounting pressure and speculation, the Bank of Japan (BOJ) chose to maintain its key interest rate.

The yen’s relentless slide, extending to 0.7% to 156.66 against the dollar, underscores deep concerns about Japan’s economic stability and the efficacy of its monetary policies.

BOJ Governor Kazuo Ueda’s remarks at a post-meeting news conference did little to assuage fears as he acknowledged the impact of foreign exchange dynamics on inflation but downplayed the yen’s influence on underlying prices.

Investors, already on edge due to the yen’s dismal performance this year, are now bracing for further volatility amid speculation of imminent intervention by Japanese authorities.

The absence of decisive action from the BOJ has heightened uncertainty, with concerns looming over the potential repercussions of a prolonged yen depreciation.

The implications of the yen’s decline extend far beyond Japan’s borders, reverberating across global markets. The currency’s status as the worst-performing among major currencies in the Group of Ten (G-10) underscores its significance in the international financial landscape.

Policymakers have issued repeated warnings against excessive depreciation, signaling a commitment to intervene if necessary to safeguard economic stability.

Finance Minister Shunichi Suzuki reiterated the government’s readiness to respond to foreign exchange fluctuations, emphasizing the need for vigilance in the face of market volatility.

However, the lack of concrete action from Japanese authorities has left investors grappling with uncertainty, unsure of the yen’s trajectory in the days to come.

Market analysts warn of the potential for further downside risk, particularly in light of upcoming economic data releases and the prospect of thin trading volumes due to public holidays in Japan.

The absence of coordinated intervention efforts and a clear policy stance only exacerbates concerns, fueling speculation about the yen’s future trajectory.

The yen’s current predicament evokes memories of past episodes of currency turmoil, prompting comparisons to Japan’s intervention in 2022 when the currency experienced a similar downward spiral.

The prospect of history repeating itself looms large, as market participants weigh the possibility of intervention against the backdrop of an increasingly volatile global economy.

As Japan grapples with the yen’s precipitous decline, the stakes have never been higher for policymakers tasked with restoring stability to the currency markets. With the world watching closely, the fate of the yen hangs in the balance, poised between intervention and inertia in the face of unprecedented challenges.

Naira

Dollar to Naira Black Market Today, April 25th, 2024

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

5 days ago

April 25, 2024

Samed Olukoya

Naira to Dollar Exchange- Investors King Rate - Investors King

As of April 25th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,300 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 N1,260 and sell it at N1,250 on Wednesday, April 24th, 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.