Post Views: 220 The U.S Dollar rose to its highest in nearly two weeks against a basket of currencies on Thursday, as a flare-up in trade tensions bet...
The U.S Dollar rose to its highest in nearly two weeks against a basket of currencies on Thursday, as a flare-up in trade tensions between the United States and China drove traders to buy the Greenback.
The Dollar index, which measures the greenback against a basket of six other currencies, was up 0.51% at 95.109, the highest since July 20. Overall, the U.S Dollar is stronger today, and most of it seems to be coming on the back of increased trade tension.
The Bank of England has raised the interest rate for only the second time in a decade.
The rate has risen by a quarter of a percentage point, from 0.5% to 0.75% – the highest level since March 2009.
While the decision means that the 3.5m people with variable or tracker mortgages will pay more, the rise will be welcomed by savers. Mark Carney, the Bank’s governor, said there would be further ‘gradual’ and ‘limited’ rate rises to come.
The bank’s Monetary Policy Committee (MPC) had been expected to raise interest rates in May, but held fire because the economy went through a weak patch at the start of the year. This is partly because of the harsh weather conditions, dubbed the Beast from the East. The bank is now confident that the dip was temporary and that economic growth will recover from the 0.2% rate seen in the first quarter, to 0.4% in the second quarter and maintain that pace later in the year.
It traded on a quiet note with slight interest on FGN bond 2028 and 2036 owing to the high yield. Traders focused on the purchase of OMO bills. The seven and 10-year bond declined to close at 13.78% and 14.23%.
The Treasury bills secondary market witnessed mixed market notably on August and July Maturities. CBN issued N363bn OMO Treasury bill to mop up excess Liquidity from the system. Yields closed at on the average.
The OBB and Overnight rates moved north to close at 3.33% and 4.25%, the decline in rates may not be unconnected with the CBN OMO sale. Rates are expected to inch high in anticipation of retail FX purchase.
The Naira closed at N305.95/$ while the I&E FX window was stable at N362.31/$.
We expect the market to be influenced by liquidity levels and foreign investor participation and the Fx market to experience support from CBN intervention sales.