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FXTM Analysis: Sterling, Euro and Dollar In Focus

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Lukman Otunuga, a research analyst at FXTM.

FXTM Research Analyst Lukman Otunuga comments on Sterling, Euro and Dollar.

Asian stocks retreated on Thursday following the mixed cues from Wall Street overnight, after the Federal Reserve signaled towards an increase in US interest rates later this year.

In Europe, equities were buoyed by corporate earnings and optimism over Emmanuel Macron winning the second round of the French Presidential election. Although Wall Street was pressured by the Fed hawks on Wednesday, Europe’s upside momentum and solid corporate earnings could help bulls claw back recent losses.

Sterling buoyed by solid Services PMI ‎
Sterling lazily strolled towards 1.2900 during trading on Thursday after UK Services PMI for April unexpectedly rose to a four-month high at 55.8.

With the construction, manufacturing and services sector in the UK all displaying signs of resilience against Brexit woes in April, Sterling could be supported in the short term.

With uncertainty still a dominant theme with regards to Brexit, investors may start to overlook the improving fundamentals with an increased focus on Brexit negotiations.

Hard Brexit fears remain rife with the current dispute over the €100 billion “Brexit bill” acting as the first major obstacle of many.

From a technical standpoint, the GBPUSD could appreciate towards 1.3000 if bulls maintain control above 1.2875. In an alternative scenario, repeated weakness below 1.2875 should encourage a decline towards 1.2775.

Dollar revived by Fed hawks ‎
The Greenback popped higher on Wednesday after the Federal Reserve surprised markets by maintaining a hawkish stance, despite the softening outlook for the US.

 Although economic data has been mixed and first quarter growth sluggish at 0.7%, the committee viewed this as transitory, with economic activity expanding at a moderate pace as the stance of monetary policy is adjusted.

With expectations heightened over the Federal Reserve raising US rates further, and the CME Group FedWatch tool displaying a 74% probability of a rate hike in June, the Dollar could remain buoyed.

Investors may direct their attention towards the pending US unemployment claims report, which could support the Dollar further if unemployment falls below estimates.

From a technical standpoint, although the Fed hawks inspired Dollar bulls on Thursday, the Dollar Index still remains under pressure on the daily charts.

A breakout above 99.40 should encourage a further incline towards 99.50 and 99.80 respectively. On the other hand, repeated weakness under 98.80 should open a path to 98.50.

Euro higher on Macron optimism
The Euro glided higher on Thursday as investors maintained optimism over Emmanuel Macron winning the second round of the French Presidential election this weekend.

Bullish investors also took advantage of the positive Services PMI data from Europe to propel the EURUSD towards 1.0930 as of writing.

With the current polls showing Macron holding a solid 20 point lead over Marine Le Pen, it may be safe to say that a Macron victory has already been “baked into” market pricing.

With the French Presidential election saga slowly coming to an end, investors may direct their focus towards the French parliamentary election on June 11 and 18.

Although the EURUSD is currently trading around five-month highs, the currency does feel undervalued, especially when factoring in how Economic data from Europe continues to exceed expectations.

I feel that political risk and uncertainty has dictated the value of the Euro this year with economic fundamentals becoming somewhat secondary.

While a Macron victory may send the EURUSD above 1.1000, an unanticipated Marine Le Pen triumph could expose prices to extreme downside risks, with parity still a possibility.

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E-Financial

Customers to Sue Banks over Stamp Duty Collections

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Stakeholders have called on the Central Bank of Nigeria (CBN) to withdraw its circular mandating banks to collect stamp duties from customers’ bank accounts, stressing that such directive and practice is unconstitutional, according to the Tribune.

According to them, if the practice of deducting stamp duties from customers’ bank accounts is not suspended, it is expected that other stakeholders would challenge the banks in court, on a case by case basis.

Thus, the impending legal suits that would emanate as a result are likely to disrupt the activities of banks and result to additional legal costs, they warned.

Stakeholders at various occasions have also charged deposit money banks to suspend the practice of collecting stamp duties on receipts for deposits and transfers by customers.

The Stamp Duties Act (SDA), Chapter S8, Laws of the Federation of Nigeria (LFN) 2004 (SDA) provides the legal basis for the imposition and collection of stamp duties in Nigeria.

A tax audit and financial advisory services firm, Deloitte, in a document titled: “Stamp Duties on Bank Deposits and Transfers: Are There Unresolved Issues?” and obtained by Tribune stated that, stamp duties are chargeable on all instruments relating to matters executed between a company and individual, group or body of individuals and those executed between persons or individuals. The instruments the firm noted, upon which stamp duties are chargeable include bond, bill of exchange, promissory note, covenant, conveyance on sale, lease, mortgage, among others.

This general rule according to the tax experts did not include receipts for transfer to self, transfers from savings accounts and receipts in respect of salaries and wages, yet, further to a statement issued by CBN on 21 January 2016 banks have continued to deduct these duties.

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UBA Disrupts the Market, Delights Customers with Callback Technology

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It would appear that the United Bank for Africa Plc has carved a niche for itself and gone way above its peers with its deployment of Al-powered Callback Technology.

The Al-Powered Callback Technology is one that enables the bank to call back customers instantly when they contact the bank for one reason or the other.

The UBA Group seems to have taken advantage of this high-powered system that even western banks are yet to fully implement as it has gone beyond the legacy banking systems, to omni channel marketing and social media lead generation.

This largely involves meeting its customers where they are – on websites, email, social networks, and cross-device platforms.

It is interesting to note that customers calling the bank for various reasons now have the option of requesting a call back to get on demand information. This has been implemented by using web to phone callback technology developed by Lucep.

Basically, the way it works is that customers can see the website widget deployed on the bank’s website for several financial services and products, wherein they can enter in their name and number, and select the reason for which they want a call back.

Thereafter, the Lucep AI takes the callback request, and distributes it to the right team, ensuring it goes to an authorized member of the team who has the app on their smartphone. This member can then connect back to the customer through the app itself.

Such instant response systems have huge benefits especially when it’s about following up on new customers who are inquiring about banking services.

If for example, a potential client is searching for the best mortgage rates and calls several banks including UBA.

UBA being the only bank that has implemented this Al -powered technology with an instant lead response system, is able to give the customer a call-back within one or two minutes.

This activity will naturally give the bank an edge over its competition as it will probably be the first to reach the customer back. The bank is therefore able to engage customers and offer their services faster than any other bank.

It is this kind of attention to detail, personalized service, and deft use of the latest technologies that has helped UBA stay ahead of its competitors in Africa, and ahead of the trends in the global banking industry.

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Five ‘Must’ Know Before Putting Your Money in Bitcoin

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Bitcoin.jpg

Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Bitcoin is now worth $4,317.

Due to this, many are encouraging others to invest in the cryptocurrency. Nigerians are slowly embracing Bitcoin.

In line with this, Jumia Travel, the leading online travel agency share things Nigerians must know before joining the Bitcoin train.

More People Are Using Bitcoin
Despite the fact that some Nigerians are struggling to accept Bitcoin, more people are embracing it after years of gradual growth.
Hence, whether we like it or not, Bitcoin is the future and we have no choice than to use it.

Retailers And Vendors Are Accepting Bitcoin
You can now pay for whatever you purchase online with Bitcoin as some retailers have made it possible to settle transactions with it. Some notable companies that accept Bitcoin include Expedia, Microsoft, Subway, Newegg, TigerDirect, Tesla and PayPal. So, do not be surprised when some Nigerian companies start to accept Bitcoin.

Bitcoin Transfers Are Fast And flexible
While many financial institutions charge you or take days to process transactions, Bitcoin allows transfers from one account to another almost for free. Of course, you must already have your money in Bitcoin form. There is no need for any middlemen. As a result, the transfer is seamless.

Extremely Volatile
Bitcoin is still growing like earlier mentioned and there are a number of market factors that influence it. It very dependent on the rules of demand and supply.
The more people are willing to buy Bitcoins, the more the Bitcoin value will increase. Conversely, if more people sell, the prices will decline.

Treat It As Speculating, Not An Investment
Cryptocurrencies have a bright future as a new way to conduct commerce and business. That is not the same thing as saying that their value right now is sustainable. It’s early days yet, and, while the number of businesses accepting cryptocurrencies are growing, it’s not big enough for most of the demand to be built on legitimate trade.
This means that buying cryptocurrencies is speculation, not investment. Hence, you should be willing to lose the money you invest in buying Bitcoin!

 

 

 

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