The
Nigerian Naira maintained stability against the Dollar on Thursday despite
growing expectations over higher US interest rates this year. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
It is becoming clear that that the Central
Bank of Nigeria’s repeated intervention in the FX market has resulted in a
stable Naira exchange. Although this method could continue supporting the local
currency, Nigeria’s external reserves may come under pressure. Sentiment
towards the Nigerian economy could take a hit if Friday's Foreign Exchange
Reserves report shows that external reserves dropped further in August.
Risk sentiment
wavers on trade fears
Market
players remain in a cautious mood as lingering concerns over trade tensions
between the United States and China dent risk appetite. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Asian
stocks relinquished earlier gains to close in negative territory this morning
while European shares declined as simmering trade tensions prompted investors
to offload riskier assets. With Donald Trump’s upcoming tariffs on $200 billion
worth of Chinese goods likely to deteriorate US-China economic ties even
further, resumed fears over trade remains a driving concern for investors.
Sterling boosted
by Barnier, bulls capture 1.3000
The
Pound experienced a sudden change of fortune after encouraging comments from
Brexit negotiator Michel Barnier
eased fears of a “hard Brexit”. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Bernier's
comments that the European Union was “prepared to offer a partnership with
Britain such as has never been with any other third party country” has made
music to the ears of Pound traders. This positive development has boosted
confidence over the direction of Brexit talks. The Pound’s aggressive appreciation
following Barnier’s comments continues to highlight how the currency remains
extremely sensitive to positive Brexit headlines.
Focusing
on the technical picture, the GBPUSD is turning increasingly bullish on the
daily charts. There have been consistently higher highs and higher lows created
since the middle of August while prices are trading above the daily 20 Simple
Moving Average. A weekly close above 1.3000 could seal the deal for bulls for
prices to attack 1.3070 and 1.3130, respectively. If 1.3000 proves a stubborn
resistance, Sterling could sink back to 1.2900.
South African
Rand tumbles as Argentina Peso slides
The
South African Rand has received another battering during trading on Thursday
with the currency being hit from multiple directions. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The
resumption of what very much could become another crisis for the Turkish Lira
complimented by the Argentine Peso situation taking another dive for the worse,
combined by prolonged concerns over trade tensions between the United States
and China, is spelling out to investors a very reluctant environment for them
to invest in high-yielding assets.
We
would keep a very close eye on the situation with the currencies of Argentina
and Turkey because it represents a major risk to deterring traders away from
investing in any high-yielding assets, meaning that the situation for the South
African Rand could get a lot worse due to external headwinds.
Commodity
spotlight – Gold
Gold’s
trajectory continues to be heavily influenced by the Dollar’s performance and
US interest rate hike expectations. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The
yellow metal depreciated today after reports of US economic growth expanding
faster than expected during Q2 cemented market expectations of a US interest
rate hike in September. With the Dollar likely to stabilize on Fed rate hike
speculation and safe-haven demand, Gold could resume the downtrend.
In
regards to the technical picture, the yellow metal needs to break back below
the $1,200 level for bears to attack $1,190 and $1,182, respectively. If the
$1,200 support holds, then prices could retest $1,214.
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