Naira static at N367/$ as Dollar slides against major currencies

The Naira remained static at N367/$ at the parallel market as activities kicked off for the new week at the parallel segment of the Nigerian foreign exchange market on Monday, July 17.

Against the British Pound Sterling, the Naira exchanged for the rate of N470 and traded at the rate of N420 against the European Single Currency, Euro.

Reacting to the development, President of the Association of Bureau De Change Operators of Nigeria, ABCON, Alhaji Aminu Gwadabe, stated that the Naira would remain stable in the months ahead as the Central Bank of Nigeria sustains its interventions at forex market.

He said that the sustained injection of liquidity to the nation’s foreign exchange market had paralysed the activities of speculators.

Meanwhile, on the international scene, the American dollar, on Monday, July 17, dipped to a 10-month low against a basket of currencies, as investors cheered upbeat Chinese data by piling into leveraged positions such as the Australian dollar and other high-yielding currencies.

The dollar was trading broadly flat at 112.575 against the yen.

Some of the biggest gains were seen in the yen crosses such as sterling, which was up 0.1 percent on the day as investors added bets that U.S. interest rates would rise very gradually in the coming months after the latest data.

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“Risk outlook remains positive after the latest figures and markets are looking to add positions especially in the high-yielding names,” said David Madden, a strategist at CMC Markets.

China’s second-quarter gross domestic product topped forecasts with a rise of 6.9 percent on the year, while retail sale and industrial output were both strong.

The Aussie shot to a two-year high and breached major chart resistance in the process in the $0.7700/7778 range. The Aussie was last at $0.7814 with bulls targeting the 200-week moving average around $0.8018. [AUD/]

U.S. rate hike expectations have been pared to less than a 50-percent probability after the latest inflation print on Friday and with no top-tier data this week, markets have plenty of time to mull over the future direction of interest rates.

The repeated disappointment on prices cast a question mark over the Federal Reserve’s confidence that inflation would soon rebound.

Latest positioning data suggest markets are also turning bearish on the dollar with the first U.S. dollar shorts evident since May 2016. However, carry trades are flourishing with Japanese yen shorts at its highest level since June 2015.