Saturday, February 6, 2016

CBN restriction of Forex on imported goods has come to stay – Saraki

saraki, senatePresident of the Senate, Dr. Abubakar Bukola Saraki has ruled out the possibility of reversing the Central Bank of Nigeria (CBN) policy excluding some imported goods and services from the list of items valid for forex in the Nigerian Foreign Exchange Market.

Saraki, while responding to a request by the Tomato Sub-Sectoral Group of the Manufacturers Association of Nigeria (MAN), seeking his intervention to lift the exemption by the CBN on certain imported goods, said based on the present economic realities, difficult decisions are necessary be taken to overcome the challenges.

The Senate President, who addressed the tomato paste producers when they paid him a courtesy visit in Abuja, said: "It is high time we start telling ourselves the home truth as a nation, we are where we are because of our refusal to take hard decisions.

"As a country, we have to chart a new way different from the past, and that path is going into manufacturing as we cannot continue to remain an import dependent country," he said.

While challenging the tomato paste producers to focus more on how to be full fledged manufacturers of the product using local raw materials, Saraki expressed surprise that in spite of the high level of local cultivation of tomatoes, the producers were still importing the Triple Concentrate used in the production of tomato paste, which he said can be produced locally by raising the production level of tomatoes in the country.

"What stops us from producing the tomato to the level of achieving the High Concentrate? You have to be serious in the area of massive investment and research in the sector for government to consider any concession for you," Saraki said.

Earlier, the leader of the group, Mr. Femi Gbadegun said though they were not against the CBN's policy restricting forex to some imported items but that they needed time to raise the level of tomato production in the country to eliminate the need for importation.

Gbadegun lamented that the policy had adversely affected the operations of members of the association.

What is Forex Trading and How Do You Get Started?

 

Forex Trading is a great way to invest if you are interested in being proactive with your money and want the fun of managing your investments hands-on.

What is Forex?

Forex means 'foreign exchange'. You are investing in a currency pair and betting that one currency will gain value against the other. And if you are thinking this is simple, you are right to some extent. But once you start with trading, you will understand what is Forex like[1] - it's quite a challenge. It can be time-intensive, since the markets are quite volatile, but it is something that anyone can learn.

Getting Started

All you need to do to understand what is Forex like is to register with a forex broker, fund the account, and pick your currencies. There are a lot of brokers that offer micro accounts, which allow you to experiment with trading with relatively small amounts of money. You can learn the ropes this way without putting a lot of your own funds at risk.

There are two main methods of dealing with the markets - fundamentals, and technicals. When you use fundamental analysis techniques, you base your trading decisions on world events and the news. Seasonal changes, weather, politics, crises and major banking announcements will all have an impact on the direction of the markets. If you have a good understanding of these things, you can use that to predict how currencies will be affected.

Technical analysis, in contrast, works on the idea that past movements in the markets will predict future trends. It uses complex mathematical equations to work out where the markets are probably going to go.

Using forex trading platforms such as Meta Trader, you can draw trend lines that will help you to see what is forex market overall direction, and work out 'support' levels that the markets are unlikely to fall below in the near future - and resistance levels, which the markets are unlikely to break above.

Usually, markets will bounce between support and resistance twice or three times, then break out in a given direction after that, before setting a new trend. With practice reading the charts, you can use this knowledge to set buy and sell points for the currencies you are interested in.

It's a sad fact that most people who trade forex lose money. This happens because they don't manage their bankrolls well. They put all of their money into one trade, and use margins and leverage too heavily. This means that when they are trading they run the risk of ending up in debt if the currency moves in the wrong direction. Using margins and leverage allows a person to buy more currency than they can actually afford - if their leverage is 50:1, then every $1 they spend gets them $50 of currency - they gain 50 times the profit if the markets move in the right direction, but lose 50 times the amount if the markets move the wrong way. Tread carefully if you are still not sure what is Forex all about, because it is easy to end up in a financial hole.

References

  1. ^ understand what is Forex like (www.xtrade.com)

Forex Market: GBP/BGN trading outlook for February 8th

Friday's trade saw GBP/BGN within the range of 2.5321-2.5498. The pair closed at 2.5436, inching down 0.08% on a daily basis. It has been the sixth drop in the past ten trading days and also a fourth consecutive one. In addition, the daily low has been the lowest level since January 21st, when a low of 2.5249 was reached. In weekly terms, GBP/BGN lost 1.12% of its value during the current week. It has been the 10th drop in the past 11 weeks, a second consecutive one and also the sharpest one since the business week ended on January 17th, when GBP/BGN went do wn 1.76%. The pair has depreciated 1.15% so far during the current month, following two successive months of decline. In January GBP/BGN fell 3.09%.

No relevant macroeconomic reports and other events, which may influence GBP/BGN trading, are scheduled on Monday (February 8th).

Correlation with other currency pairs

Taking into account the week ended on February 5th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

GBP/BGN to USD/CHF (0.9710, or very strong)
GBP/BGN to USD/JPY (0.9521, or very strong)
GBP/BGN to USD/BGN (0.9266, or very strong)
GBP/BGN to USD/CAD (0.5163, or strong)
GBP/BGN to DKK/BGN (0.1469, or weak)
GBP/BGN to AUD/USD (-0.2809, or weak)
GBP/BGN to CHF/BGN (-0.3329, or moderate)
GBP/BGN to GBP/USD (-0.5791, or strong)
GBP/BGN to NZD/USD (-0.7491, or strong)
GBP/BGN to EUR/USD (-0.9311, or very strong)

1. During the examined period GBP/BGN moved almost equally in one and the same direction with USD/BGN, USD/JPY and USD/CHF. This relationship has been the most pronounced between GBP/BGN and USD/CHF.

2. GBP/BGN moved almost equally in the opposite direction compared to EUR/USD during the week.

3. GBP/BGN moved strongly in one and the same direction with USD/CAD during the period in question, while moving strongly in the opposite direction compared to GBP/USD and NZD/USD.

4. The correlation between GBP/BGN and DKK/BGN, GBP/BGN and AUD/USD was insignificant.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.5418
R1 – 2.5516
R2 – 2.5595
R3 – 2.5693

S1 – 2.5339
S2 – 2.5241
S3 – 2.5162

By using the traditional method of calculation again, the weekly pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.5583
R1 – 2.5844
R2 – 2.6253
R3 – 2.6514

S1 – 2.5174
S2 – 2.4913
S3 – 2.4503

Author: [1] Miroslav Marinov, a financial news editor at Binary Tribune, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market.

References

  1. ^ (www.binarytribune.com)

Friday, February 5, 2016

China’s forex reserves poised for another record drop

AFP/Getty Images
China has been burning through its pile of reserves as it battles a crisis of confidence.

Investors will be on the lookout for evidence that China is denting its sizable foreign exchange reserves when the People's Bank of China releases data for January on Sunday, potentially underlining fears that Beijing is in danger of running out of ammunition as it battles a crisis of confidence.

"In a nutshell, we believe capital outflows will continue as long as markets expect the Chinese yuan to depreciate," said analyst David Fernandez at Barclays, in a note.

Most economists expect a sharp drop in reserves—ranging anywhere from $38 billion to $180 billion—as investors continue to withdraw funds from the country. The country's reserves had fallen a record $108 billion to $3.3 trillion in December[1].

"The market remains content that massive firepower remains to support the renminbi. It does not," said Albert Edwards, Société Générale global strategist, who predicted that China will soon burn through its reserves[2] and be forced to float the yuan within the next six months.

The China narrative took a decidedly gloomy turn in recent weeks with Beijing warning billionaire George Soros[3] against shorting the yuan after he predicted a hard landing of the economy.

Yet, instead of deterring China bears, the public challenge appears to have emboldened Wall Street investors like Kyle Bass of Hayman Capital Management, who is throwing most of his hedge fund's resources into betting against the yuan[4].

"You can't grow your banking system 1,000% in 10 years and not have a loss cycle. And your currency won't stay strong when you go to rectify that balance," Bass said in an interview with CNBC.

Barclays' Fernandez projected China's reserves to be depleted by as much as $140 billion, falling to $3.19 trillion in January, which would make it the largest monthly drop on record.

In contrast, Claudio Piron, a currency strategist at Bank of America Merrill Lynch, expects a more moderate decline of $38 billion which is significantly below what other economists are forecasting. But there is a catch.

Bank of America Merrill Lynch

"One of the key barriers to forecasting China FX reserves is that it is a residual or outcome of a number of other variables," he said.

In other words, trying to accurately predict China's reserves is a tricky endeavor.

References

  1. ^ $3.3 trillion in December (www.wsj.com)
  2. ^ burn through its reserves (www.marketwatch.com)
  3. ^ warning billionaire George Soros (www.marketwatch.com)
  4. ^ betting against the yuan (www.marketwatch.com)

Forex reserves dip to $80.16 B in Jan

MANILA, Philippines – The country's foreign exchange reserves declined in January due to strong outflows arising from payments by the national government of its maturing foreign debt, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando Tetangco Jr. said the country's gross international reserves (GIR) went down to $80.16 billion in January from $80.67 billion in December.

Tetangco said the $508 million decline was due to the foreign exchange outflows arising from payments by the government of its maturing foreign exchange obligations, as well as the central bank's foreign exchange operations.

The outflows, Tetangco explained, were partially offset by inflows from the national government's net foreign currency deposits and income from the central bank's investments abroad as well as the revaluation of its gold holdings due to higher price in the international market.

The GIR is the sum of all foreign exchange flowing into the country. The reserves serve as buffer to ensure the Philippines would not run out of foreign exchange that it could use to pay for imported goods and services, or maturing obligations in case of external shocks.

If it deems necessary, the BSP buys dollars from the foreign exchange market to prevent sharp depreciation of the peso. It can also sell to avoid sharp appreciation of the local currency.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Tetangco said the end-January GIR level remains ample as it can cover 10.2 months' worth of imports of goods and payments of services and income. It was also equivalent to 5.5 times the country's short-term external debt based on original maturity and four times based on residual maturity.

The central bank lowered its GIR level forecast for 2015 to $80.7 billion from the original target of $81.6 billion projected last May.

However, the country's GIR level slightly missed the revised target as it reached $80.67 billion in 2015 from $79.54 billion in 2014.

For this year, the BSP sees the GIR hitting $82.7 billion, equivalent to nine months import cover.

The BSP now expects cash remittances from Filipinos abroad growing by four percent instead of the original projection of five percent for 2015 and 2016.

It also expects the current account surplus of $5.7 billion this year lower than the projected level of $8.9 billion in 2015 due mainly to the expected large increase in the imports of goods, notwithstanding improvements in the services and secondary income accounts.

The country's strong macroeconomic fundamentals would help the Philippines survive external shocks brought about by uncertainties caused by the interest rate lift off in the US as well as the economic slowdown in China, Tetangco said.

Tetangco earlier said the country's external current account remained in surplus and improvements in external payments dynamics also served to help shield the economy and the domestic financial markets from financial market volatility.

"In the presence of mounting external shocks, keeping one's own house in order by sustaining strong macroeconomic fundamental serves as our first line of defense," he said.

Forex - Pound slides lower against stronger dollar

Investing.com - Investing.com - The pound slid lower against the U.S. dollar on Friday, as the greenback regained some ground ahead of a highly-anticipated U.S. employment report due later in the day.

GBP/USD hit 1.4515 during European morning trade, the pair's lowest since February 3; the pair subsequently consolidated at 1.4527, declining 0.42%.

Cable was likely to find support at 1.4380, the low of February 3 and resistance at 1.4652, Thursday's high and a one-month high.

The dollar had come under pressure after New York Federal Reserve President William Dudley said on Wednesday that the weakening outlook for the global economy and any further strengthening of the dollar could have "significant consequences" for the health of the U.S. economy.

Investors were looking ahead to the U.S. nonfarm payrolls report for January, due later Friday, for fresh indications on the strength of the labor market.

Data on Thursday showed that initial jobless claims rose by a larger-than-forecast 8,000 to 285,000 last week, but remained in territory usually associated with a firming labor market.

Sterling was also lower against the euro, with EUR/GBP rising 0.26% to 0.7704.

In the euro zone, data earlier showed that German factory orders fell by 0.7% in December, compared to expectations for a downtick of 0.5%, after a 1.5% increase the previous month.

Investing.com
Investing.com[1] offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com apps[2] for Android and iOS!

References

  1. ^ Investing.com (www.Investing.com)
  2. ^ Investing.com apps (www.investing.com)

Forex - EUR/USD pulls away from 3-1/2 month highs after U.S. data

Shutterstock photo

Investing.com -

Investing.com - The euro dropped against the U.S. dollar on Friday, pulling away from a three-and-a-half month high as mostly positive U.S. jobs data lent support to the greenback, while a disappointing economic report weighed on the single currency.

EUR/USD hit 1.1116 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.1140, declining 0.60%.

The pair was likely to find support at 1.1067, Thursday's low and resistance at 1.1352, the high of October 22.

The Labor Department said the U.S. economy added 151,000 jobs in January, compared to expectations for an increase of 190,000. The economy created 262,000 jobs in December, whose figure was revised from a previously estimated 292,000 gain.

The U.S. unemployment rate ticked down to 4.9% last month from 5.0% in December. Analysts had expected the unemployment rate to remain unchanged in January.

The report also showed that average hourly earnings rose 0.5% in January, compared to expectations for a 0.3% gain, after a flat reading in December.

Separately, data showed that the U.S. trade deficit widened to $43.36 billion in December from $42.23 billion in November, whose figure was revised from a previously estimated deficit of $42.40 billion.

Analysts had expected the trade deficit to hit $43.00 billion in December.

In the euro zone, data earlier showed that German factory orders fell by 0.7% in December, compared to expectations for a downtick of 0.5%, after a 1.5% increase the previous month.

The euro was steady against the pound, with EUR/GBP at 0.7685.

Investing.com
Investing.com[1] offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com apps[2] for Android and iOS! http://glocdn.investing.com/news/LYNXMPEB1H05W_M.jpg

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Referenced Stocks:

References

  1. ^ Investing.com (www.investing.com)
  2. ^ Investing.com apps (www.investing.com)

FOREX-Dollar gains after U.S. data suggests possible 2016 Fed rate hikes

(Updates to open of U.S. trading, adds comments, changes byline, dateline; previous LONDON)

* U.S. average hourly earnings up 0.5 percent in January

* Wage data dents view of zero Fed rate hikes in 2016

* Dollar briefly touches over 15-week low vs euro

* Dollar index still set for worst weekly drop since Oct. 2011

By Sam Forgione

NEW YORK, Feb 5 (Reuters) - The U.S. dollar rebounded against a basket of major currencies on Friday after data showed a pickup in U.S. wages in January, suggesting greater inflation and denting the view that the Federal Reserve would not hike rates at all this year.

U.S. Labor Department data showed that average hourly ea rnings increased 12 cents, or 0.5 percent, last month, leaving the year-on-year gain in earnings at 2.5 percent.

The wage data was enough to drive the dollar higher even as non-farm payrolls increased by just 151,000 jobs last month, below the 190,000 that economists in a Reuters poll had expected. The unemployment rate was at 4.9 percent, the lowest since February 2008.

The dollar had plummeted in the past two sessions on the view that weak domestic economic data and worries over the global economy could prevent the Fed from hiking rates this year. Comments from New York Fed president William Dudley to MNI on Wednesday were viewed as dovish and had also hurt the dollar.

Friday's data "could maybe bring in the timing of the next hike a little bit, but in order for that to shift more significantly, you would need to see stabilization and improvement in other data and some stabilization in the global outlook," sa id Ian Gordon, FX strategist at Bank of America Merrill Lynch in New York.

The euro briefly hit a more than 15-week high against the dollar of $1.12500. The dollar hit a more than two-week low against the yen of 116.285 yen immediately after the data but later reversed course to trade higher.

The dollar index, which measures the greenback against a basket of six major currencies, reached a session high of 97.236 after hitting a roughly 15-week low of 96.259 Thursday. The index was still set for its worst weekly percentage decline since October 2011.

The dollar also rebounded against the Swiss franc. It hit a session high of 0.99840 franc after briefly falling to a nearly four-week low of 0.98805 franc immediately after the data .

"The pickup in average hourly earnings really gives something for the hawks on the Federal Reserve to point to and argue that wages are coming back," said Chris G affney, president of EverBank World Markets in St. Louis.

(Reporting by Sam Forgione; Editing by Lisa Von Ahn)

Forex reserves rises by $1.589 bn to $349.152 bn last week

Country's foreign exchange reserves rose by $1.589 billion to $349.152 billion in the week to January 29, helped by an increase in foreign currency assets (FCAs), according to the Reserve Bank.

In the previous week, the reserves had increased by $355.1 million to $347.562 billion. FCAs, a major component of overall reserves, increased by $1.584 billion to $326.631 billion in the reporting period, RBI said in a release today.

Reuters

Reuters

FCAs, expressed in dollar terms, include the effect of appreciation and depreciation of non-US currencies such as the euro, pound and the yen, held in the reserves.

The gold reserves remained unchanged at $17.240 billion in the period.

India's special drawing rights with the International Monetary Fund (IMF) grew by $3.8 million to $3.988 billion in the week, while country's reserve position with the Fund was up by $1.2 million to $1.292 billion, the apex bank stated.

PTI

Forex reserves up by USD 1.589 bn to USD 349.152 bn

Forex reserves up by USD 1.589 bn to USD 349.152 bn
Country's foreign exchange reserves rose by USD 1.589 billion to USD 349.152 billion in the week to January 29, helped by an increase in foreign currency assets (FCAs), according to the Reserve Bank.

In the previous week, the reserves had increased by USD 355.1 million to USD 347.562 billion. FCAs, a major component of overall reserves, increased by USD 1.584 billion to USD 326.631 billion in the reporting period, RBI said in a release on Friday.

FCAs, expressed in dollar terms, include the effect of appreciation and depreciation of non-US currencies such as the euro, pound and the yen, held in the reserves.

The gold[1] reserves remained unchanged at USD 17.240 billion in the period. India's special drawing rights with the International Monetary Fund (IMF) grew by USD 3.8 million to USD 3.988 billion in the week, while country's reserve position with the Fund was up by USD 1.2 million to USD 1.292 billion, the apex bank stated.

References

  1. ^ gold price (www.moneycontrol.com)