The combination
of Dollar weakness and improving risk appetite is a welcome development for
most major emerging market currencies. However, the Nigerian Naira has yet
again struggled to benefit from such welcome market conditions with prices
hovering around 365 on the parallel exchange.
It is becoming
clear that the Naira’s stability against the Dollar was the product of repeated
intervention by the Central Bank of Nigeria. With falling oil prices weighing
on the Naira’s peg against the Dollar on the official exchange and complicating
the CBN’s effort to defend the Naira on the parallel, further weakness seems to
be on the cards. While fading trade tensions and Dollar weakness is seen
limiting capital outflows, falling oil prices are poised to negatively impact
government revenues and the implementation of the 2019 budget. While the
short-term outlook for the Nigerian economy may look discouraging, confidence
in the nation will most likely receive a boost in the medium to longer term if
increased government spending ahead of the elections next year stimulates
economic growth.
Away from
Nigeria, all of the currencies in the APAC region are trending higher against
the Dollar, with the exception of the Indian Rupee that has declined 1.03% at
time of writing as a result of local data missing expectations. The South Korean Won, which is often measured
as the Asian currency proxy for investor appetite towards risk is higher by
more than 0.91% while the Chinese Yuan is stronger by as much as 1.09%.
This rally has
filtered through to other regional emerging markets and asset classes,
including the South African Rand and Mexican Peso that are both more than 1% stronger
on trade truce optimism. The rally that we are experiencing goes to show that
in spite of the trade tensions between United States and China being seen as
bilateral issues between themselves, being two major global economic powers
means this does have huge ramifications for global market optimism. WTI Oil is
higher by over 5% in the early hours of Monday trading, which goes a long way
towards explaining how global market optimism and previous concerns about trade
tensions can impact commodity markets.
In recent weeks
Oil has suffered severely from global economic health concerns stemming from
trade tensions leading to lower demand for Oil, and if there is further
progression with this issue it would be seen as a potential “buy” for the Oil
markets.
If there is further progression over trade tensions between
the United States and China then this has the potential to create a heavy
market rally before trading wraps up for 2018. The main question that investors
now need answers for is how long can this trade truce rally really last, and is
it also possible for further progress in trade talks between the United States
and China from this trade truce?
Have you heard this? Many Nigerian exporters have been defrauded of huge amount of money in the process of exporting commodities to foreign countries. Do you know why? They were not trained on export operations, management, documentations and the best methods of payment in export trade. This is terrible!!! Nigerians cannot continue to lose money to foreigners in the course of export business. Exporters, why don’t you get a practical manual that teaches the stages of export trade from processing and packaging of commodities to receipt of payment by the foreign buyers. It teaches export operations, export management, export documentations and methods of payment in export trade? It is a contemporary step-by-step guide to export trade. It tells all the contemporary dynamics in export trade. To get it, click on the link below:
http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
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