Naira depreciates at black market as BDCs expect another forex allocation from CBN

The U.S dollar traded unusually very high on Tuesday’s trading session, as many currencies, cryptos, and commodities dropped momentarily as global investors flocked to the U.S dollar.

At the time this report was drafted the U.S Dollar Index, which is used to gauge the strength of the greenback against a basket of six major currencies, surged as high as 0.65% to trade at 93.323.

Gold futures prices were down 0.60%, Bitcoin dropped 0.5% to trade at $10,060 price level, Brent crude was down over 2% to trade at $41.

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The dollar bulls are roaring high on the recent U.S jobs data showing a decline in the U.S unemployment rate, and a recent surge in U.S. Treasury yields, thereby giving the bulls more gas to push the greenback higher today.

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Meanwhile, in an explanatory note to Nairametrics Stephen Innes, Chief Global Market Strategist at AxiCorp spoke about the latest macros affecting the currency market. He said;

“As FX traders continue to follow the coronavirus pandemic track in Europe, the spotlight shines specifically on the ECB’s latest monetary policy decision, where verbal intervention concerns remain elevated.

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“During President Lagarde’s subsequent press conference, she could heed ECB Chief economist Lane’s inflation warnings and talk the Euro down.

“Still, with Brexit in the news, it is challenging to categorize the Euro separately from the discussion. Hence the EURUSD is likely feeling some knock-on pressure from the Pound slide as GBP is under a bit of tension in Asia ahead of the resumption of Brexit negotiations when Barnier arrives in London today.”

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However, broader sentiment on the U.S dollar remains weak after Federal Reserve Chair, Jerome Powell reiterated recently that the central bank plans to keep U.S. interest rates lower for longer.

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