Forex

Forex Weekly Outlook August 21-25

Published

7 years ago

August 20, 2017

Forex Weekly Outlook August 21-25

Global uncertainties surged to a record high last week after Barcelona was attacked amid the U.S. Charlottesville violence and North Korea missile threat. Nevertheless, global economy remained moderately strong with the U.S. retail sales rising to a 7-month high in July, Euro-area economy growing at 0.6 percent rate and the Japanese economy sustaining its trade surplus for the second consecutive quarter.

Even though, the weak global inflation rate continued to weigh on Central Banks’ policies and balance sheet normalization, the U.S. Federal Reserve has signaled its readiness to commence unwinding its $4.5 trillion stimulus program as early as October.

This week, I will be looking at NZDJPY, USDCAD, and GBPUSD.

NZDJPY

Since the Reserve Bank of New Zealand left the official cash rate unchanged at 1.75 percent in August, the New Zealand dollar has lost its bullish momentum against most of its counterparts. This is because the apex bank intentionally maintains lower interest rate to weaken the New Zealand dollar in order to boost inflation rate towards its target. Indicating that rising New Zealand dollar is hurting consumer prices and impacting monetary policy outlook.

According to the Reserve Bank Governor Graeme Wheeler high trade-weighted exchange rate is hurting consumer prices, a lower New Zealand dollar is needed to boost tradeable inflation and deliver more balanced growth.

This comment weighed on the New Zealand dollar by attracting sellers to short the haven currency and lower its exchange rate against other major currencies.

On the other hand, the Japanese yen remains strong even amid weak wage growth and near zero inflation rate. The economy expanded for a six straight quarter in the second quarter at a 4 percent growth rate, beating analysts’ 2.5 percent estimation. While business spending rose 2.4 percent and private consumption jumped 0.9 percent.

Also, trade surplus rose for a second consecutive month in July, trade surplus was 418.8 billion yen ($3.81 billion) (estimate +327.1 billion yen).

Technically, last week candlestick closed as a bearish pin bar below a key resistance 81.02 as shown above. Suggesting continuation of the bearish move started two weeks ago after peaking at 83.89 price level. Again, this pair started a recurring pattern in November, one that the first leg was completed in April, somehow, I think this bearish move is the completion of the second leg and I will expect a sustained break of 78.83 support to open up 76.25. Therefore, I am bearish on this pair.

USDCAD

The US dollar remained weak even with the strong economic fundamental, the political uncertainty continued to impact the attractiveness of the greenback. However, the Canadian dollar, on the other hand, has gained substantially since the Bank of Canada raised interest rates and labour market revamped to add over 40,000 jobs in a month.

Also, since I first mentioned the USDCAD here in July, this pair after hitting our first target retraced to as high as 1.2777. But given the current uncertainty in the U.S., especially the recent Charlottesville violence, North Korea missile threat and the inability of the Donald Trump’s administration to pull off tax cut yet. I will expect USDCAD to resume its bearish move this week, a close below 1.2494 support level should strengthen buyers’ interest and aid price towards our second target of 1.2217.

GBPUSD

The United Kingdom is expected to release details of how it will treat confidential EU information obtained before Brexit and on goods placed on supply chains in the EU single market on Monday. While this is a good development, Brexit negotiation has proven to be a tough road to travel and the twists and turns are expected to impact the British pound this week.

Again, while the US uncertain remains, the GBPUSD is likely to be weighed upon by Brexit negotiation and the Euro-area uncertainty. Likewise, the weak wage growth, slowing consumer spending, and low new investments will continue to affect the pound outlook going forward.

Therefore, a sustained break below the ascending channel will affirm bearish continuation while a break of 1.2785 support level is expected to attract enough sellers to open up 1.2602 first target.

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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

1 day 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

1 day 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.