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Exchange4free Global Forex Report (25/10/2017)

USD

The Dollar once again opened strongly this morning with the Dollar Index edging up 0.2%. The continued surge may disseminate from a variety of factors including Trump’s imminent decision on the next Federal Reserve System (FED) chair. Various reports are suggesting that John Taylor has increasing support from Republicans to become the next FED chair. In the market he is viewed as someone who may promote the FED to increase interest rates faster than they currently are. The Dollar is also benefiting from the optimism of tax reform which has continued from last week.

EUR

The Eurozone Purchasing Managers Index (PMI) figure released yesterday surprised on the downside coming in lower than expectations. While manufacturing in the region continued to increase, PMI in the services sector fell. The market however, responded well leading to the Euro trending stronger and revealing that markets are more interested in growth in the manufacturing sector than that of services. IHS Markit said that if PMI continues on the current path that economic growth in fourth quarter could be in the region of 0.6% to 0.7%.

The European Central Bank (ECB) is also expected to announce tomorrow that it will start trimming its balance sheet in January 2018.

GBP

The Pound has currently taken a dive amid speculation of the interest rate hike that might be postponed. This has come about after deputy Bank Governor, Sir Jon Cunliffe, suggested that a rate rise may not be delivered given concerns over Britain’s economic forecast. We will see some volatility later today as the UK releases its third quarter Gross Domestic Product (GDP) figures.

Things don’t seem to be getting any better over the next few weeks with the interest rate situation seeming to only get murkier as the November meeting draws closer and Brexit negotiations still weighing negatively on the Pound.

AUD

The Australian Dollar took a sharp fall after inflation data missed expectations. Quarterly inflation growth was 0.6 percent which left the annual rate at 1.8 percent missing forecasts by 0.2 percent on both quarterly and annually.

With CPI missing its forecasts the AUD/USD went to its lowest level since July.

CHF

The Swiss Franc was trading lower today against both the EUR and USD. EUR/CHF managed to trade above the 1.16 mark (EUR/CHF).

Factors attributed to the decline include markets expectations from the ECB meeting tomorrow as well as a stronger US Dollar. Investors also have a bit of a stronger risk appetite at the moment which is leading to marginal outflows from safe haven currencies.

ZAR

Today is a big day for the South African Rand with the Medium Term Budget Speech taking place at 2pm. The Rand has recently been under pressure, trading around 13.70 against the Dollar on Tuesday. The Rand is expected to remain under pressure prior to Finance Minister Malusi Gigaba’s maiden budget speech.

The speech will be watched closely today and the overall consensus of the speech is not positive. We expect that the weak economic growth of the country will be addressed and expect to hear information regarding the financial bailout of South African Airlines. We also hope to hear Gigaba addressing the concern regarding the multibillion-rand nuclear deal.

We will either be shocked to realise that our situation is worse than expected or perhaps a credible plan will be introduced that will provide direction and solutions to all our underlying issues.

NGN

On Tuesday, we saw gains in the following sectors: Banking, Oil and Gas, food, beverages and tobacco. As a result, the Nigerian Stock Exchange rose by 0.46% by close on Tuesday.

The oil minister announced on Tuesday that Nigeria is targeting to produce 1.8 million barrels of oil per year by early next year.

Exchange4free Global Forex Report (18/10/2017)
Exchange4free Global Forex Report (01/11/2017)

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