Forex

Forex Weekly Outlook September 12 – 16

Published

8 years ago

September 11, 2016

Early last week the US dollar slid after data revealed that the services sector that have been supporting the economy contracted from 55.5 in July to 51.4 in August, before gaining back part of its losses as the odds of the Federal Reserve raising rates this month increases. While the majority of analysts have favoured September rate hike, I have my reservation for several reasons, one, the weak manufacturing sector and contraction in the activities of the services sector are some of the key criteria mentioned by the Fed Chair Janet Yellen during Jackson Hole speech for rate decision.

Two, even though the unemployment rate (4.9%) is near a record low and employers are said to be having trouble finding qualified and skilled workers, and are hesitant to dismiss employees, average hourly earnings rose less than expected in August. All these coupled with worse than expected second quarter economic growth rate (1.1%) are likely to compel the Federal Open Market Committee to hold back, at least to monitor improvement this third quarter before increasing borrowing cost.

Nevertheless, the retail sales that came out flat (0.0%) in July is due this week and expected to drop even further to -0.1 percent by economists, while the producer price index that measures consumer inflation is expected to rise just 0.1 percent in August from July 0.4 percent decline.

China, the world’s second largest economy, consumer price inflation dropped to its weakest in almost a year last month, but the producer price index moderated slightly from -1.0 percent to -0.8 percent in August. Also, China’s imports rose for the first time in almost two years last month as businesses restocked and wholesale inflation expectations rose. While, some analysts have interpreted it as a sign of steady economy, it is too early to deduce the direction of China’s economy, especially with exports slowing and credit risks rising as the People’s Bank of China continued to expand monetary easing.

In Australia, the seemingly positive Chinese data briefly aided Aussie dollar to 77.31 against the US dollar, before slumping nearly a whole cent to 75.36, after the RBA Governor Glenn Stevens said any further appreciation in the local currency could give Australia trouble. This, with a slowdown in economic growth rate in the second quarter to 0.5 percent and housing issues in some of the biggest Australian cities are issues the incoming RBA governor must address. This week, Australian unemployment rate, employment change and NAB business confidence are due.

The European Central Bank shocked the markets last week when Mario Draghi said the central bank doesn’t need to commit to fresh stimulus and left interest rates unchanged, even with inflation below 2 percent target and progress slowing as Brexit continued to weigh heavily on the world’s single largest market just six months to the end of the current Quantitative Easing. The 25-member Governing Council has decided to keep its main refinancing rate at zero, the deposit rate at – 0.4 percent and asset purchases at about 80 billion euros ($90 billion) a month until March 2017.

Draghi knows what has to be done — asset purchases will have to continue beyond March 2017 — but it seems too many of the council want to delay the decisions over what to buy and for how long,” said Richard Barwell, senior economist at BNP Paribas Investment Partners in London. “In the meantime, Draghi struggled manfully not to raise expectations of the inevitable.

This week, I will refer to the analysis of AUDUSD and EURUSD Forex three weeks ago.

AUDUSD

Three weeks ago, I said Australian dollar is overpriced. Below are my exact words.

Click to enlarge

For a while the Australian dollar has been overpriced, but yet continued to gain against the US dollar and its peers. Last week, sellers jumped on the pair immediately Fed officials signals possibility of the Federal Reserve raising rates later in the year, and break the ascending channel started on May 30. This week, if the markets continue to price in that possibility, the strong dollar will likely weigh on the pair and may finally give us 0.7505 as explained last week. I believe a technical break below the ascending channel should be enough to force traders to start pricing in the 25 basis points cut. This week, I am bearish on this pair as long as 0.7673 resistance holds.

EURAUD

This week, the ECB further strengthen our position by keeping rates unchanged and downplaying stimulus expansion.

Click to enlarge

This pair has gained 487 pips since Aug 11th, and positioned for even more. Here is why I think this pair may offer buyers opportunity, the Euro-area has shown resilience since the U.K exit the European Union, and has complemented its moderate fundamental with strategic monetary policy. Another reason is the U.K post-Brexit retail sales report released last week, would likely reduce the heavy negativity surrounding the Brexit and boost the business activities of the Euro-area.

Technically, after breaking 1.4665 resistance on Wednesday, the Thursday’s candlestick that closed as a bullish pin bar on the daily time frame was the first sign of bullish continuation. While the morning start pattern formed on weekly time frame validate this stance. This week, as long as 1.4665 support holds, I am bullish on this pair with 1.5008 as the Forex 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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Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Published

2 days ago

May 17, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight improvement in the Naira exchange rate when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

Buying Rate: ₦1,540
Selling Rate: ₦1,530

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Forex

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

Published

2 days ago

May 17, 2024

Samed Olukoya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Published

3 days ago

May 16, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 2024.

This indicates a decline in the Naira exchange rate compared to the current rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.