Dollar Wavers Between Gains and Losses – WSJ

U.S. economic data sends investors mixed signals

 
 By   IRA IOSEBASHVILI

The dollar shuffled between gains and losses Thursday, as investors digested a series of mixed U.S. data releases.

The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.1% at 93.36. The measure hit 93.05 earlier in the session.

U.S. gross domestic product expanded at 3.5% in the last quarter, a faster pace than previously estimated and the strongest quarterly growth in two years, data showed. Other numbers were less positive: durable goods orders slipped from a month ago, while jobless claims rose to a six month high, though the overall trend remained consistent with a labor market that is adding jobs.

On the whole, the reports did little to shift expectations that a more hawkish Federal Reserve and fiscal expansion under the incoming presidential administration will boost the economy next year and take the dollar higher, analysts said.

“The data was solid and suggests that while the economy may have shifted to a lower gear in the fourth quarter, that overall momentum remains considerably stronger than most other major economies around the world,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, in a note to clients.

The euro was up 0.1% at $1.0437. The dollar was unchanged at ¥117.56. Against the Russian ruble, the dollar fell 0.4% to 60.94.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

Nigerian interbank rate jumps to 50 pct on cenbank forex sales -traders – Reuters

LAGOS Dec 23 (Reuters) – Nigeria’s overnight lending rate rose sharply to around 50 percent on Friday, from an average of 4.5 percent the previous day, after the central bank debited commercial lenders’ accounts for special forex sales, traders said.

Nigeria’s central bank on Monday asked banks to submit bids for a “special currency auction” to clear the backlog of matured outstanding dollar obligations for selected sectors of the economy, which include airlines, fuel importers and manufacturing firms. 

Traders said the central bank sold “funded forwards of two to five months tenor” dollars to the targeted sectors at an auction this week and required them to pay for the dollar sale on Friday.

The central bank is yet to disclose the amount sold but currency traders said the cost of borrowing among banks climbed because of a scramble for funds among commercial lenders to pay for the forex purchases.

“The market is extremely volatile today as a result of the funding for the special forex auction, and we have seen rates up to around 50 percent and more,” one currency dealer said.

Another dealer said his bank received around $11 million from the special forex sales, but were awaiting details of the total dollars sold to other banks at the auction.

Nigeria is in its first recession in 25 years, caused by low global oil prices which have cut the supply of dollars needed to fund imports. Attacks by militants on pipelines in the oil-rich Niger Delta since January have cut crude output, reducing dollars earned.

The dollar shortage in the OPEC member, whose crude sales make up two-thirds of government revenue, has caused many companies to halt operations and lay off workers, compounding the economic crisis.

The naira currency has traded at around 305.5 naira to the dollar on the official interbank market since August, while it was quoted at 495 to the dollar on the parallel market on Friday.

Nigeria’s financial market is closed until Wednesday due to public holidays over the Christmas period.

(Reporting by Oludare Mayowa; Editing by Alexis Akwagyiram and Toby Chopra)

 

REFILE-Nigeria sells 40 bln naira in treasury bills at flat yields – Reuters

(Removes extraneous word from first paragraph)

LAGOS Dec 23 (Reuters) – Nigeria raised 39.72 billion naira ($130.57 million) at a treasury bill sale on Wednesday, with yields unchanged on the previous auction, the central bank said on its website on Friday. 

It sold 13.17 billion naira of three-month paper at 14 percent, the same yield as on Dec. 14, and sold 26.55 billion naira of six-month paper at an also unchanged 17.5 percent.

The auction was sparsely subscribed with total demand of 42.68 billion naira.

Nigeria’s central bank issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to help the government fund its budget.

($1 = 304.20 naira) (Reporting by Oludare Mayowa; Editing by Alexis Akwagyiram and John Stonestreet)

 

Naira falls further, expected to trade at N500 next week – Businessday

The nation’s currency, the naira on Thursday weakened further against the US dollar, closing at a record low of N495 at the parallel market.

It is expected to fall further following the persistent dollar shortage. The weekly dollar allocation to Bureau De Change operators by Travelex, a global currency has been reduced to $8,000 from $15,000 previously.

Naira lost N3.00k or 0.61 from N492 traded on Wednesday at the parallel market. The local currency remained stable at the inter-bank spot market, closing at N305.25, according to data from FMDQ.

The CBN scrapped a 16-month-old peg of 197 naira to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there than on the parallel market. The government has blamed that black market for damaging the already shaky economy.

Kemi Adeosun, finance minister had said earlier that the Central Bank of Nigeria (CBN) is working on the elimination of arbitrage in the foreign exchange market.

African Markets – Factors to watch on Dec 23 – Reuters

Dec 23 (Reuters) - The following company announcements, scheduled economic indicators, debt
and currency market moves and political events may affect African markets on Friday.
    - - - - -
 EVENTS:
     * Mauritius releases Q3 growth figures and updates 2016
 and 2017 growth forecasts
 
 GLOBAL MARKETS
 Asian stocks stepped back in subdued trade on Friday as Wall
 Street took a breather from its relentless rise since the
 U.S. election, while the dollar hovered below the 14-year
 high set earlier this week.
            
 
 WORLD OIL PRICES
 Oil prices slipped on Friday in thin Asian trade ahead of
 the Christmas and New Year holidays, eroding some of the
 gains in the previous session as traders took profits.
      
 
 EMERGING MARKETS
 For the top emerging markets news, double click on
            
 
 AFRICA STOCKS
 For the latest news on African stocks, click on     
 
 SOUTH AFRICA MARKETS
 South Africa's rand eased slightly against the dollar on
 Thursday and traders expected it to drift sideways for the
 rest of the week, driven mainly by position-squaring ahead
 of the yearend and an extended long weekend.
 Stocks also stumbled, following Asian shares lower in
 holiday-thinned trade. Monday and Tuesday next week are
 public holidays in South Africa.
             
 
 KENYA MARKETS
 The Kenyan shilling        was stable against the dollar on
 Thursday in spite of demand from retail importers buying
 dollars to stock shelves for the festive shopping period,
 traders said.             
 
 BURUNDI SPENDING
 Strife-torn Burundi will increase public spending by 5.3
 percent next year despite a cut in aid from donors linked to
 political turmoil, according to a budget passed in
 parliament on Thursday             
 
 NIGERIA WATER CRISIS
 Nigeria's commercial capital Lagos faces a water crisis that
 is creating unacceptable conditions for millions of people,
 a U.N. expert said on Thursday, but an official in the
 megacity said spending was being increased to alleviate the
 problem.             
 
 LIBYA OIL   
 The reopening of western Libya's main oil pipelines puts
 ambitious production targets within reach, but the shadow of
 an unresolved conflict and the risk of new blockades hang
 over potential output gains.             
 
 CONGO VIOLENCE
 Congo authorities swept through the southeastern mining hub
 of Lubumbashi on Thursday making dozens of arrests, local
 activists said, after at least 34 people died in protests
 against President Joseph Kabila.                   
 
 RWANDA VOLKSWAGON
 Volkswagen             plans to start a ride-hailing service
 in Rwanda in a sign of how the German carmaker is developing
 pay-per-use transportation models in new markets where rival
 Uber           has not yet gained traction.