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Dollar Bulls Seek Inspiration

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The Greenback edged higher against a basket of currencies on Tuesday with prices stabilising above 100.00 as investors adopted a defensive stance ahead of next week’s FOMC meeting.

With the CME Fed watch tool displaying a healthy 94.9% probability of an interest rate increase this month, much attention may be directed towards the intensity of rate hikes in 2017.

As the year slowly comes to an end Fed members have repeatedly expressed their optimism about the health of the US economy while positive domestic data continues to bolster sentiment on growth towards the largest economy in the world.

November’s Trump effect still fuels the Dollar with optimism over Donald Trump implementing fiscal stimulus measures reinforcing expectations of an improvement in overall US GDP. A strong rise in inflation from healthy growth could force the Federal Reserve to raise US interest rates aggressively in an effortto prevent the economy from overheating.

Dollar bulls remain in firm control amid the encouraging outlook towards the U.S with further appreciations expected as domestic data continues to exceed estimates. From a technical standpoint, the Dollar Index is bullish on the daily timeframe and a breakout above 101.00 could encourage a further incline higher towards 102.00.

Sterling stumbles lower
Sterling was exposed to heavy losses on Wednesday following the UK’s disappointing Industrial Production datawhich exacerbated the ongoing Brexit concerns. Industrial production fell 1.3% in October while manufacturing production declined 0.9% ultimately sparking fears of the Brexit woes weighing heavily on the UK economy.

Sterling weakness remains a recurrent theme with the terrible combination of ongoing Brexit anxieties and uncertainty encouraging bears to install heavy rounds of selling at any given opportunity.

Sterling/Dollar continues to be pressured on the daily timeframe with a breakdown and daily close below 1.260 triggering a steeper selloff towards 1.250.

Currency spotlight – EURUSD
The Euro/Dollar descended from its three-week high during Tuesday’s trading session with prices hovering above 1.070 as anxiety mounted ahead of Thursday’s heavily anticipated European Central Bank meeting.

Recent events across Europe have placed the Euro on a chaotic roller coaster ride with the terrible combination of political instability in Italy and overall uncertainty keeping investors on edge.

Market participants may use Thursday’s ECB meeting to attain further clarity over the health of the European economy and strategies needed to mitigate the risks from Italy’s referendum. It is being widely expected that the central bank extends its QE purchase by at least six months amid the uncertainty consequently leaving the Euro exposed to further pressure.

From a technical standpoint, the EURUSD is currently hovering above the pivotal 1.065 support and 1.085 resistances.

Monday’s miraculous rebound seems unsustainable and such could expose the pair to downside risks. A breakdown below 1.065 could open a path back towards 1.050.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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