Forex

Forex Weekly Outlook September 18-22

Published

7 years ago

September 17, 2017

Forex Weekly Outlook September 18-22

As projected, the U.K consumer prices rose from 2.6 percent in July to 2.9 percent in August. Boosting the Pound to more than 14-month high last week as investors believe the almost 3 percent inflation rate would force policymakers to raise rates in order to curb escalating consumer prices. However, wage growth remains weak, even with the unemployment rate at a 42-year low, earnings grew at 2.1 percent year-on-year and below the pace of inflation. Another indication that growing job market is yet to translate to wage growth.

In the US, inflation rate climbed higher than projected for the first time in five months, and surged from 1.7 percent year-on-year in July to 1.9 percent in August. While this is slightly below the 2 percent inflation target of the Federal Reserve it is closer than experts projected and likely to aid balance sheet normalization due to be announced in October.

But rising consumer prices has started eroding consumers’ buying power as retail sales fell 0.2 percent in August while the preceding two months were revised down. Signaling weak consumer spending and partly the reason factory production declined by 0.3 percent.

Also, while the extent of Hurricane damage is yet to be evaluated, it impacted some of the figures as data collection lagged behind in areas affected.

This week, AUDUSD, CADJPY, EURJPY, NZDJPY and EURGBP top my list.

AUDUSD

The Australian dollar rose more than two-year high against the US dollar two weeks ago, but plunged after the Reserve Bank of Australia Governor Philip Lowe said the high exchange rate is impacting inflation rate and economic output. Since then the Aussie has loss 122 pips and closed as a gravestone doji last week. A sign of bearish pressure.

Also, the US inflation rose better than expected and forecast to sustain its progress in the fourth quarter, when the effect of the Hurricane would have filtered through key economic sectors.

Again, while the uncertainties surrounding tax cut and North Korea missile threat are weighing on the US dollar outlook. The Australian dollar, on the other hand, is overpriced and likely to remain less attractive in coming days.

Technically, I don’t see this pair breaking 0.8121 resistance level and expect a break below the 20-day moving average and the ascending trendline as shown above to reinforce sellers’ interest towards 0.7829 support level. Especially now that the Hurricane impact is limited and data showed increased odds of the Fed commencing balance sheet normalization next month. This week I will look to sell this pair below the ascending trendline for 0.7829 targets.

CADJPY

The Canadian dollar rose to more than 19-month high against the Japanese Yen last week. However, after the North Korea fired another missile towards Japan this weekend, the second within two weeks, investment inflow is likely to be affected and business sentiment weaken as businesses and investors will look to assess the situation before making further commitments. This will affect the Yen outlook against other currencies.

Another key fact to note is that both the Japanese and Canadian economies are growing healthy but the growing uncertainty in Japan and near-zero inflation rate plunged the currency against its counterparts last week.

This week, I will expect a sustained break of 90.80 price level to increase buyers’ demands for CADJPY and open up 93.20 resistance level. Therefore, I will be looking to buy this pair above the 90.80 this week.

Please note that the Bank of Japan is expected to maintain current policy rate on Thursday when the apex bank is due to announce its rates and release economic outlook. Likewise, the Canadian consumer prices due on Friday will impact the Canadian dollar outlook, a positive data will further boost loonie outlook against the yen but a better than expected Japan policy rate will void this analysis.

EURJPY

Since the European Central Bank president, Mario Draghi said inflation rate remains a concern and far below the apex bank target, the odds of the apex bank raising rates or unwinding balance sheet soon has dropped. But the strong economic data, growing manufacturing sector, surge in exports, consumer spending and foreign direct investment amid weak wage growth, is supporting the Euro economic outlook.

Again, while the Japan economy grows faster at 4 percent in the second quarter. The Bank of Japan governor, Haruhiko Kuroda said it is not sustainable. Also, the uncertainty in the world’s third-largest economy would impact the Yen attractiveness this week.

This pair has gained more than 900 pips since June and continued to establish high-high candlesticks. Therefore, this week I will expect a close above 133.09 resistance level to boost the attractiveness of the EURJPY towards 136.37 targets. I am bullish and will be buying above 133.09 levels.

Last Week Recap

NZDJPY

The growing demand for haven assets boosted the New Zealand dollar attractiveness last week, but the uncertainties surrounding the Japanese Yen aided its gains.

This pair closed above the 20-day moving average last week. Indicating bullish momentum, however, a close above the 81.02 resistance level is needed to validate bullish continuation. Therefore, this week I will look to buy this pair above 81.02 resistance level and expect a sustained break to increase its demand towards 83.81 targets.

EURGBP

As explained last week, the Pound gained across the board on rising inflation.

This week I will expect the increase in the odds of the Bank of England raising rate to aid EURGBP to 0.8717 targets.

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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

7 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

3 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

4 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.