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Naira stays firm as dollar wallows in red against peers

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6 years ago

April 17, 2018

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The Naira on Monday, April 16, maintained strength at the parallel segment of the Nigerian Foreign Exchange Market, exchanging at the rate of N363 against the United States of America Dollar.

Against the British Pound Sterling, the local currency closed at the rate of N510 and exchanged at the rate N445 against the European Single Currency, Euro.

According to findings by National Daily, the local currency maintained the same rates of N363 against Dollar, as it was last week, but slipped against Euro.

Meanwhile on the international market, the United States of America Dollar held steady within established trading ranges on Monday, April 16, as investors who have recently bet heavily against the greenback digested the implications of weekend strikes on Syria by United States and its allies.

Against a broad basket of its rivals, the dollar was flat at 89.75. It has weakened 0.3 percent so far this month, taking its year-to-date losses to 2.5 percent extending a theme firmly in place since last year.

Despite widening interest rate differentials in its favour and the widest yield gap between two-year U.S. and German debt for nearly three decades, the dollar’s performance in recent months has been closely correlated to swings in risk appetite.

Despite some jitters in emerging markets last week, notably currencies in Russia and Turkey, broad positioning on the dollar remained at multi-year highs.

Other major currencies also remain trapped in trading ranges, with the euro starting the week around $1.23, a level around which it had traded all last week.

The U.S. Treasury semi-annual report didn’t jolt the currency markets, with the Trump administration again refraining from naming any major trading partners as currency manipulators as it pursues potential tariffs and negotiations to try to cut a massive trade deficit with China, Reuters reports.

Although the Japanese yen usually draws demand in times of political tension and market turmoil due to its perceived safe-haven status, the dollar’s losses against it were small.

“The reaction in currencies has been limited as President Trump had provided advance notice about a possible strike on Syria, giving speculators ample time to brace for the actual event,” said Yukio Ishizuki, senior forex strategist at Daiwa Securities in Tokyo.

“Many speculators are showing less of a response to yen-supportive factors lately, after the Bank of Japan made clear it was not going to normalise policy soon. This goes for domestic factors as well, like falling support ratings for (Japan Prime Minister Shinzo) Abe.”