|USD/NGN yesterday’s close||408|
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Oil prices dipped in early trading on Friday after the Saudi energy minister tempered expectations of strong market intervention by producers during talks next month.
South Africa’s rand weakened further to a one-month low on Thursday, weighed down by lingering uncertainty over whether the finance minister faces arrest.
Nigeria’s naira was quoted at an all-time low of 409 to the dollar on the black market on Thursday, compared with 402 the previous day, after the suspension of some banks from forex trading made dollars even harder to obtain.
Kenya’s central bank pumped dollars into the market early on Thursday, helping to lift the shilling, after it weakened on the back of President Uhuru Kenyatta’s decision to approve a law capping commercial lending rates, traders said.
All eyes on today’s Jackson Hole meeting where Pres. Yellen of the FED will speak to global Central Bankers. I imagine she will reiterate the importance of stable markets and maintain their vision for a global economy pre 2008. In other words she will probably make some mention about US rates and whether they are going to rise or remain static in September. Of course as a Central Banker and amongst Central Bankers, the rhetoric will be coded by the NSA (that’s the National Space Agency not the Security Agency) because that’s how these bankers like to talk to each other. Then you have the traders, strategists and economists who will then try to make heads or tails and trade against that. So really tonight is very important indeed as far as US interest rates are concerned and will dictate the next direction for the USD (and GBP as a result). The FED futures market is currently pricing in a 57% possibility that the FED will hike rates in December. September currently sits at around 30%…
The GBP as a result has traded strongly (if you can call a 1.32 handle strongly) over the past few days ahead of tonight’s talk. We have in the past few moments dipped below 1.32 handle but its negligible. I think if there is a delay in hiking in September this could and should push the GBP up a big figure and then see what happens. I know I am going against the tide, but something tells me the GBP is due a BIGGER correction.
Have a great (long) weekend
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