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Exchange4free Global Forex Report (26/04/2017)


This week will be filled with interesting news out of US markets; beginning with President Trump’s tax announcement later today and a potential US government shut-down, should a budget not be passed by midnight on Friday.

Trump’s premise of fiscal stimulus, including corporate tax cuts and large spending on infrastructure, have lost a bit of steam with the failure to repeal Obamacare.

Today’s announcement is expected to lack the necessary details that markets are so desperately looking for, which could lead to the reversal of reflation trade in the US and possible Dollar weakness.


The Eurozone seems a bit more stable today following a few jitters earlier in the week after the results of the first round of the French election.

The election results seem a bit clearer now with latest polls pointing towards a 60% chance of a Macron win. Opinion polls have been misleading in the past, so time will tell as to who will take the reins in the French government.

On Tuesday, Eurostat announced that the Eurozone’s budget deficit was down to its lowest level since the most acute phase of the Global Financial Crisis.

The deficit is now at 1.4 percent; down from the 1.6 percent of the fourth quarter of 2016. Statistics agency, Eurostat, attributes the latest drop as largely due to lower expenditure by governments.


GBP/USD has climbed to around the 1.28 mark following the release of UK government borrowing figures, which have fallen to the lowest level since the 2008 financial crisis.

This shortfall is the lowest since the financial crisis and 28 percent lower than the £71 billion borrowed in the 2015-16 tax year. This is largely due to decreases in government spending in the region.

The Sterling is also trending stronger on the back of news out of the first round of the French election, with the favourite (Macron) showing a strong lead in the polls with possible further strength later today after Trump’s tax announcement.


The Australian Dollar has been trading sideways in recent days against the US Dollar, while weakening slightly against the GBP; however it could gain some strength in coming weeks with an expected increase in the price of iron ore and coal due to a supply shortage.

A potential supply shortage of the above commodities following damage from Hurricane Debbie could see the AUD strengthening due to increased demand and in turn increased prices as iron ore and coal are some of Australia’s exports.


The Swiss Franc continues to trade in a stable environment with its popularity as a safe haven currency increasing. The Japanese Yen as well as gold have also been treated as safe havens for investors in the past, however the Yen is losing ground due to its proximity to North Korea (and the increased tension between North Korea and the US).

At the moment the market is showing signs of risk on with the results of the French election looming on the 7th of May, however this could turn post-election if the market decides “risk off” where it seems that the CHF could be the safe haven of choice for quite a few investors.


The Rand strengthened earlier in the week with news out of France and continued to benefit from a “risk on” environment. A weaker Dollar has also added to recent gains with little confidence expected in US markets later today when President Trump announces his plans for tax reform.

South Africa’s Rand retreated slightly today due to investors easing their appetite for risk, as well as other technical factors. Further strength may be seen later in the week, if news out of the US on Friday states the budget is approved.


The Nigerian Central Bank has taken a stance at improving market liquidity with the introduction of a special window for investors.

The special window for investors, exporters and end-users will be used to boost FX liquidity. This is a welcomed development as it signals intent from the CBN to improve liquidity in the FX market and allow for a market-driven exchange rate for eligible transactions.

The Naira was stable in the parallel market and rates remained at N382 per Dollar.

Exchange4free Global Forex Report (19/04/2017)
Exchange4free Global Forex Report (10/05/2017)

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