• 10 largest economies in Africa ranked by currencies

    Business Insider Africa has done its bit to present the currencies of the top 10 largest economies in Africa ranked from best to worse.

    This ranking is not based on any other thing than by the strongest currencies on the continent.

    As you may see from the table in this post, Africa has a diverse range of currencies. However, currency performance in Africa is a complex issue with no one-size-fits-all solution.

    We at AidenPromotions believe that to a large extend, this currency rank is authentic. That’s why we are sharing it with our audience.

    Note that these are the primary economies possessing the power to determine Africa’s financial course. The impact of these countries spread throughout the continent, luring investors and driving regional growth.

    It is a wonder how well the currencies of these giant economies are performing. Also important is that people should know currency performance is an important indicator of a country’s economic stability and prosperity, and its performance varies greatly between countries in Africa’s varied and vibrant continent.

    As could be seen, countries like South Africa, and Morocco boast relatively stable currencies due to their stronger economies, some other nations both big or small may struggle with currency volatility because of fiscal and monetary policies. Socio-economic and political complications are also part of the problem.

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  • Yen weakens as Japan continues shifting Currency Rhetoric

    Japanese Yen is going up and down in the spectrum. It trading on a softer note in Asian session as the rebound witnessed yesterday begins to lose steam.

    The country’s Finance Minister, Shunichi Suzuki raised some interest among market observers. He said the ongoing weakening of Yen is partly due to two main things:
    interest rate differentials
    steering away from the customary practice of solely pointing fingers at speculative trading.

    Currency experts are now awaiting to see if this expanded rhetoric will hold over time. There’s not much left for anyone to do.

    The dangers

    More significantly, the change in tone could potentially hint at BoJ mulling over the idea of moving away from its negative interest rate regime or could even suggest an acceptance of a further decrease in Yen’s exchange range. And that will be bad for the economy, even more.

    As it was seen, the USD/CNH dips to as low as 7.2694 but quickly recovered. A head and shoulder top could be in the making (ls: 7.3491, h: 7.3679, rs: 7.3311).

    Further decline in USD/CNH and decisive break of 7.2593 could mark the start of reversal to the whole up trend from 6.6971 (Jan low).

    If materializes, the subsequent selloff could be steep and extra support could be give to AUD/USD for a take on 0.6500 near term resistance. Bad for the Yen? Maybe yeah…

    Should this materialize, we could see a precipitous sell-off, potentially lending additional support to the AUD/USD, setting the stage for a challenge of the 0.6500 resistance in the near term.

    Where other markets in Asia are up, Japan 10-year JGB yield is down -0.0339 at 0.769.

    Overnight, DOW rose 0.59%. S&P 500 rose 0.63%. NASDAQ rose 0.39%. 10-year yield rose 0.013 to 4.797.

    But as experts believe, increases in real yields can arise from changes in investor’s attitudes toward risk and uncertainty

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  • Dollar rises as Pound slides to 6-month low

    The dollar scaled a 10-month high on Wednesday, pushing the euro and sterling to six-month lows and keeping the yen deep in intervention territory, as the prospect of higher-for-longer U.S. rates gripped markets.

    U.S. Treasuries stabilised after their recent heavy selloff, though yields remained near 16-year peaks, keeping the greenback solidly bid.

    The euro was last down 0.3% at $1.0534, its lowest level since March 15. The single currency is on track to lose more than 3% in the three months to end-September, its worst quarterly performance in a year.

    Sterling eased 0.2% to its lowest since March 17 at $1.2134, and was headed for a quarterly loss of more than 4%.

    The U.S. dollar index , which measures the greenback against a basket of other major currencies, peaked at a 10-month high of 106.49.

    “It’s clear now that markets see higher long-term yields in the U.S. for a longer period. That’s the main driver for the dollar here,” said Dane Cekov, senior FX strategist at Nordea.

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  • Yen backtracks after strong move higher…

    The yen retreated on Tuesday, coming off its biggest one-day percentage rise since mid-July as the currency strengthened on comments from Japan’s top central banker, while the U.S. dollar gained as investors awaited the latest reading on inflation.

    The greenback strengthened 0.39% at 147.15 against the yen to recover somewhat from a 0.83% fall on Monday against the Japanese currency after comments from Bank of Japan (BOJ) Governor Kazuo Ueda heightened expectations the central bank could shift away from its negative interest rate policy.

    Read more

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  • Dollar edges up ahead of inflation reading

    The dollar edged up ahead of the key U.S. inflation report due later on Wednesday, while the euro fell from a one-week high in the previous session with traders cautious ahead of an expected European Central Bank rate hike on Thursday.

    The dollar index , which tracks the currency against six peers including yen, euro and sterling, held firm, though moves were subdued, up 0.1% to 104.70, as traders awaited the U.S. consumer price index (CPI) reading for August. The release comes just a week before Federal Reserve officials gather to decide on interest rate policy.

    The consumer price index likely increased by 0.6% last month, according to a Reuters survey of economists. That would be the largest gain since June 2022 and would follow two straight monthly advances of 0.2%.

    The central bank is largely expected to keep rates on hold at next week’s meeting, according to CME’s FedWatch Tool. The Fed’s next move in November remains more uncertain.

    “If inflation were to be within the framework of expectations or even come in slightly below that, those who expect the Fed to have reached the end of the rate cut cycle are likely to feel confirmed,” said You-Na Park-Heger, FX analyst at Commerzbank.

    Elsewhere, the euro edged 0.1% lower to $1.0742 ahead of the ECB meeting on Thursday.

    Markets have raised their bets on further rate hikes and are now pricing in a 53% chance of a 25 basis point move this week.

    A source told Reuters that the ECB expects inflation in the 20-nation euro zone to remain above 3% next year, bolstering the case for a 10th consecutive interest rate increase on Thursday.

    “With fresh signs of inflationary pressures, investors also moved to price in a growing chance that the ECB would in fact go ahead with another hike tomorrow,” said Jim Reid, strategist at Deutsche Bank.

    Sterling slipped 0.3% to $1.2454, on track for its biggest daily drop in a week as UK economy contracted by 0.5% in July, a worse than expected 0.2% contraction in gross domestic product.

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  • UPDATE 2-Euro zone bonds steady, markets increase bets…

    Euro zone government bonds held steady on Tuesday even as money markets slowly increased their bets on another rate hike by the European Central Bank, if not necessarily at its meeting this week.

    Investors are almost evenly split on whether the ECB will raise interest rates on Thursday, with euro short-term rate (ESTR) forwards pricing roughly a 50% chance of a 25 basis point (bps) hike, from around 40% the day before.

    Money markets are close to fully pricing in a 25 basis point ECB move by year-end, with no further tightening afterwards.

    Expectations that rate hikes are near the end was a factor in helping German investor sentiment unexpectedly improve in September.

    But bonds remained fairly steady despite the gradual ticking up in ECB rate expectations, cautious ahead of Wednesday’s crucial U.S. inflation data that will set the tone for whether the Federal Reserve will raise rates again, and the ECB’s Thursday meeting.

    Germany’s 10-year government bond yield, the benchmark for the euro area, edged up to 2.64%.

    “A hawkish tone from the U.S. CPI data and a hike from the ECB could give front-end rates a larger lift this week,” said Benjamin Schroeder, senior rate strategist at ING.

    Germany’s two-year bond yield was 3.12% up 3 bps.

    Recent comments from Fed officials have indicated the Federal Reserve is content to keep rates steady at its next policy meeting on Sept. 19-20 but is not ready to declare the war on inflation is over.

    Also in the mix on Tuesday was data showing German wholesale prices fell for the fifth month in August due to lower prices for mineral oil products.

    However, oil prices, which have been triggering concerns about the inflation outlook, rose with Brent up nearly 2%.

    Italy’s 10-year government bond yield, the benchmark for the euro area periphery, edged up 1 bp to 4.4%.

    The spread between Italian and German 10-year yields – a gauge of investor sentiment towards the euro zone’s more indebted countries – was at 174.5 bps, just off its widest level in two months.

    Source: Reuters

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  • Canadian dollar extends rebound from 5-month low

    The Canadian dollar strengthened against its U.S. counterpart on Monday, adding to its recovery from a five-month low, as an increase in risk appetite weighed on the safe-haven U.S. dollar.

    The loonie was trading 0.4% higher at 1.3580 to the greenback, or 73.64 U.S. cents, after moving in a range of 1.3562 to 1.3639. On Thursday, the currency hit its weakest intraday level since March 28 at 1.3694.

    “It has been a fairly quiet day activity-wise, with the rebound in U.S. equities lending some support to the risk backdrop, which has weighed on the USD more broadly,” said George Davis, chief technical strategist at RBC Capital Markets.

    The U.S. dollar (.DXY) gave back some recent gains against a basket of major currencies and Wall Street rallied as investors awaited U.S. inflation data on Wednesday.

    The price of oil , one of Canada’s major exports, settled down 0.3% at $87.29 a barrel but holding near 10-month highs following fresh Saudi and Russian crude output cuts.

    The move higher for the loonie follows stronger-than-expected domestic jobs data on Friday that kept alive prospects of another interest rate hike by the Bank of Canada.

    The central bank left its policy rate on hold last week at a 22-year high of 5% after hiking in June and July.

    Canadian government bond yields rose across a steeper curve, tracking moves in U.S. Treasuries. The 10-year was up 2.1 basis points at 3.699%.

    Reporting by Fergal Smith, editing by Deepa Babington – Reuters

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  • Zloty Slide Sends Warning Across EU’s East on Rate Cut Risks – YAHOO!

    The steep rout in eastern European currencies is raising speculation among market strategists that policymakers will have to slow their plans to ease monetary policy.

    The Polish currency dropped 0.3% against the euro, extending its decline to 3.4% in the past week after a bigger-than-expected rate cut roiled markets. With Hungary already months into an easing cycle and the Czech Republic weighing when it should embark on its own, the three countries led losses across emerging markets.

    Last week’s 75 basis-point rate cut in Poland, which was three times larger than expected, sparked the selloff as it raised questions about the central bank’s determination to curb inflation weeks before parliamentary elections. The move was “premature” because of persistent inflation, central banker Przemyslaw Litwiniuk told TVN24 television in an interview Monday.

    Bank of America strategists on Tuesday closed a long euro-zloty position as they expect authorities will step in to bolster the currency, “via verbal, direct interventions or liquidity management,” strategists led by Mikhail Liluashvili wrote in a note.

    The extent of the decline appears to have put also some policymakers on notice. What happened to the zloty is a clear signal about how such rate decisions can impact the central bank’s credibility, another member of the Polish Monetary Policy Council Ludwik Kotecki told reporters on Tuesday.

    In the Czech Republic, board member Jan Prochazka said in an interview for E15 newspaper that his central bank must avoid cutting interest rates too soon as underlying inflationary pressures are still “very strong.”

    Source: Yahoo!

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  • Nigerian naira vs dollar: currency on edge ahead of another hike

     

    The Nigerian naira remained on edge on Tuesday morning as investors waited for the upcoming interest rate decision by the country’s central bank. The official USD/NGN exchange rate stood at ~800, a few points below the year-to-date high of 820. On the other hand, the black market rate has surged to a record high as the spread between the two widens.

    CBN makes another move to make things better

    The Central Bank of Nigeria (CBN) will conclude its meeting today and deliver another interest rate hike in a bid to fight the soaring inflation. This is coming at a difficult time for Nigeria’s economy.

    The Nigerian currency has plunged while inflation has surged to a record high. Data shows that the official exchange rate against the dollar started the year at 450. This means that Nigerians with naira savings have seen the value of their holdings tumble.

    There are evidences that the depreciating naira is causing an indirect salary cut while inflation is the reason for indirect tax.

    Inflation jumps

    Nigeria’s inflation has jumped and the news is sad. According to a latest report, the most recent data showed that inflation has moved to above 20%. And this could worsen after the main oil and gas company boosted prices by 16% as I wrote here. In a report, Fitch warned that Nigeria’s inflation will average 25.1% this year. It said:

    “These reforms will exert significant upward pressure on consumer prices in H2, 2023, with inflation set to average 25.1 per cent in 2023, the highest annual rate since the 1990s. This will further erode consumers’ purchasing power, clouding the outlook for private consumption.”

    The country has also seen the cost of borrowing grow. Interest rates moved from 11.50% in March 2022 to 18.50%. Analysts believe that the bank will deliver another 50 basis point rate hike in its attempt to save the crashing naira.

    Will the move succeed?

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  • Is Nigeria’s ecurrency enaira making progress?

    It is more than six months since Nigerians got the news that the federal government has released the eNaira.

    Looking back, we see that the ecurrency has not really made the impact that government wanted in the first place.

    The problem with it is that Nigerians have no need of it.

    There’s an app released with it but the app has been downloaded just over 100,000 times, even though there are more than 200 million people in Nigeria.

    FG claimed that the ecurrency can increase the country’s GDP by $29bn in ten years.

    Let’s hope it does.

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