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Exchange4free Global Forex Report (19/04/2017)


The USD devalued against the majority of its peers on Tuesday, on the back of the surprise election call by UK prime minister Theresa May. A small portion of the losses were recovered this morning, as we saw the USD bounce back from the levels seen yesterday (against a basket of currencies).

The USD also remains under pressure due to geopolitical tension with North Korea, as well as lacklustre US economic reports.


The French elections continue to remain a key focus for investors as the presidential race has become increasingly unpredictable, with reports claiming that a third of the electorate remains undecided.

The elections are largely seen as a test for Euro zone unity, and we could see big movements and a lot of volatility depending on which candidates make it to the second round. At the moment, it seems like we could be in for a Macron / Le Pen showdown.


UK prime minister’s announcement of early elections on the 8th of June, saw the GBP/USD pair briefly hit a overnight high of 1.2908.

The Deutsche Bank, whom have long expressed bearish sentiments towards the Sterling, are now changing their views, as they believe that the election and potential majority, offers Prime Minister, Theresa May, more room to negotiate and organise a slower, softer Brexit.


The Australian Dollar had its largest decline against the GBP in nearly two years – and the highest percentage decline in a day since August 2015 on Tuesday. Chief Market Strategist at IG Markets in Melbourne, Chris Weston, stated that much of the move is owed to the decision of the UK Prime Minister to have a UK election on 8 June.

Minutes from this months RBA meeting revealed the concerns of the Central Bank regarding the strength in the housing market and the weaker-than-expected labour market conditions.


Jorg Gasser, the state’s secretary for International Financial Matters, stated that Switzerland is not manipulating its currency. It met two of the three criteria to be named a manipulator. Gasser stated that the Swiss Franc is just highly overvalued and has to be kept at a level for the economy to function.


The Rand continues to do surprisingly well. Risk aversion and Dollar weakness are acting as competing pressure on the Rand and it is not clear which factor should dominate. For now, the bias on the Rand remains to gain, despite local issues and an increasing pressure on emerging markets.

In their latest outlook for 2017, the International Monetary Fund believes that South Africa’s Gross Domestic Product (GDP) growth would be 0.8 percent and 1.6 percent next year as commodity prices rebound, drought conditions eased and electricity capacity expands. It remains unclear as to whether this forecast was made prior or post the cabinet reshuffle.

The forecast contrasts with the SA Reserve Bank GDP forecast in March of 1.2 percent this year and 1.7 percent next year.


The Naira firmed against the US dollar in the parallel market on Tuesday, closing at N398/USD, as the Central Bank sustains the supply of Dollars.

Official rates saw the Naira closing at N306 to the USD.

In other news, World Economics (a UK based organisation focused on producing analysis and insight), believes that the Nigerian economy is finally on its way out of a recession, after 10 months of consecutive contraction in 2016.

Exchange4free Global Forex Report (04/04/2017)
Exchange4free Global Forex Report (26/04/2017)

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