Forex

Forex Weekly Outlook August 15 – 19

Published

8 years ago

August 14, 2016

Forex Weekly Outlook August 15 – 19

The US dollar lost against most of its counterparts last week, even after the economy added 292,000 jobs in June and 255,000 in July. Most analysts attributed the weakness to worse than expected 1.2 percent GDP growth rate in the second quarter of the year, while some economists blamed it on surge in global risks and uncertainty surrounding Federal Reserve’s rate hike this year.

Either way, retail sales added to the dollar woes on Friday, plunging to a year low in July. Another sign that the consumer spending that has been supporting the US economy is waning as uncertainty increases. Although, unemployment claims came out better than expected and remains below 300,000 for the 75th consecutive weeks –yet consumer sentiment rose less than predicted.

But if July inflation rate and building permits came out positive on Tuesday, the US dollar will likely gain back part of its losses as investors are expected to respond positively because it would cast doubt on the validity of the retail sales figure in the long term. Also, it is good to note that the current market trend is largely being influenced by speculations, like we’ve seen in the Kiwi and Aussie dollar when market participants refused to price in the 25 basis points cut because according to them it was too small.

In New Zealand, the Reserve Bank of New Zealand cut the official cash rate by 25 basis points from 2.5 percent to 2.0 percent, but the local currency rose to a year high, peaking at 73.37 cents to a US dollar as banks reportedly passed just 5 – 10 of the 25 basis points to customers and increased deposit rates for savers by 0.5 percent. Hurting monetary expansion by the central bank to pressure costs in order to boost weak inflation. However, economists and experts have said the central bank needs to lower rate by another 25 basis points to 1.75 percent before the current monetary policy will be effective.

Whereas, retail sales rose in the second quarter of the year by 2.3 percent, exceeding 1 percent expected by most economists and 1 percent recorded in the preceding quarter. This indicates that the economy (consumer spending) is picking up even with high foreign exchange rate and weak consumer prices, but the weak China’s data released on Friday weighed on the local currency, plunging it against the US dollar even after US retail sales came out below expectation. However, if the RBNZ decides to hold off on further stimulus to monitor current improvement, especially with the second quarter employment change, unemployment rate and producer price index due on Wednesday, current stimulus may eventually crystallize.

Last week, the pound remained the worst performing currency for a second week after the Bank of England restarted its stimulus program on Monday. The pound declined 1.2 percent to $1.2911 against the US dollar, and weakened 1.9 percent to 86.51 pence per euro. This week, I will be looking at two currency pairs USDCAD and AUDUSD.

USDCAD

Last week, the Canadian dollar gained with crude oil, following the comments of Saudi Arabia’s Energy Minister Kahlid al-Falih on Thursday that the oil rich nation is prepared to discuss how to stabilize oil prices at an informal OPEC meeting in September.

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Since then, the Canadian dollar has gained 122 pips against the US dollar, and currently trading below 1.3033 resistance and upward trend line drawn two weeks ago. This week, as long as 1.3033 resistance holds, I am bearish on USDCAD with 1.2723 as the target. The data for Canada’s July manufacturing sales will be released on Tuesday, while inflation rate and retail sales are due on Friday.

AUDUSD

Two weeks ago I explained why I won’t be buying bullish Aussie dollar after the Reserve Bank of Australia expanded monetary policy. Last week, the currency climbed as high as 77.58 cents to a US dollar before retreating due to weak Chinese economic data, this week I think the weak Chinese data of Friday will likely reinforce sellers’ interest considering the 25 basis points cut is yet to be priced in and open up 0.7505 support, but first a break of 0.7588 is important for a bearish confirmation below the channel.

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Australia’s monetary policy minutes is due on Tuesday, while both unemployment rate and employment change will be released on Thursday.

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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

2 days 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

2 days 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

3 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.