Interbank market news scan as of 12:42 pm AST: central banks, cryptocurrencies, foreign exchange

Currency pairsFederal Reserve as of 25 January 2021Reuters as of 25 January 2021Reuters as of 26 January 2021 
AUD/USD0.77280.77130.7754 
USD/CAD1.27111.27511.2695 
USD/CNY6.48106.47846.4636 
EUR/USD1.21791.21381.2166 
USD/INR72.980072.954572.8814 
GBP/USD1.36851.36641.3733 
USD/JPY103.7600103.7600103.7700 
USD/MXN19.925020.110120.0006 
USD/DKK6.10816.12666.1245 
USD/NOK8.48208.54188.5475 
Sources: Federal Reserve, Reuters

The dollar’s strength continues to vary since our post yesterday.  The dollar weakened against the Australian dollar, the Canadian dollar, and the Chinese yuan.  The dollar also weakened against the British pound and the Mexican peso.  It continues to trade flat against the Japanese yen.

In other news …

Bank Indonesia will continue to maintain loose monetary policy until such signs emerge, given that inflation is currently under control, says Perry Warjiyo, the central bank’s governor. Indonesia may see signs of inflation pressure in fourth quarter of 2021: Central bank governor (msn.com)

Brazil‘s central bank does not expect to raise interest rates in the immediate future because of an unusually high degree of economic uncertainty, minutes from its last policy meeting showed on Tuesday, although fiscal risks could prompt it to tighten policy faster than its baseline scenario suggests. Brazil central bank unlikely to raise rates now as economy sputters, minutes show | Nasdaq

Nigeria’s central bank held its benchmark lending rate at 11.5% on Tuesday, governor Godwin Emefiele said at its first interest rate meeting of 2021. Nigeria’s central bank holds benchmark lending rate at 11.5% | Reuters

China’s central bank won’t exit “prematurely” from its supportive monetary policies while at the same time keeping debt risks under control, Governor Yi Gang said. China Central Bank Won’t Exit Prematurely From Stimulus, Yi Says – Bloomberg

No existing cryptocurrency has a structure that is likely to allow it to work as a means of payment over the long term, Bank of England Governor Andrew Bailey told an online forum hosted by the Davos-based World Economic Forum on Monday. Current cryptocurrencies unlikely to last, Bank of England governor says | Reuters

As of 6:01 am AST, the American dollar shows signs of strength even as Trump hints of relief bill veto …

Pairs Federal Reserve as of 18 December 2020 OANDA as of 18 December 2020 OANDA as of 23 December 2020 
GBP/USD 1.3497 1.3520 1.33917 
USD/CAD 1.2776 1.2760 1.28855 
USD/CNH 6.5395 6.5197 6.53796 
USD/DKK 6.0798 6.0731 6.09361 
EUR/USD 1.2236 1.2248 1.22053 
USD/INR 73.5300 73.4139 73.8348 
USD/MXN 19.9813 19.8978 20.0804 
USD/JPY 103.3500 103.35 103.49 
USD/NOK 8.5959 8.5878 8.68615 
USD/SEK 8.2786 8.2747 8.28832 
USD/CHF .8850 .8844 .88724 

Legal/Political events impacting foreign currencies

Trump wants more money for taxpayer households

Bloomberg reporting today President Donald J. Trump’s concerns that the pandemic relief package approved by Congress does not go far enough in providing aid to households. The President would like the current proposed amount of $600 relief for an individual increased to $2,000. Mr Trump has not definitively said that he will veto the $900 billion package which is due for his signature by 28 December.

Comparison of foreign exchange rates determined by the Board of Governors of the Federal Reserve System with current market rates.

Federal Reserve as of 4:15 pm 11 December 2020OANDA as of 10:53 am EST 15 December 2020
EUR/USD = 1.2112EUR/USD = 1.21443
GBP/USD = 1.3197GBP/USD = 1.33503
USD/CAD = 1.2767USD/CAD = 1.27548
USD/JPY = 103.880USD/JPY = 103.93

As of 11:30 am AST 10 December 2020, Foreign exchange rates between U.S., select countries in East Africa, West Africa, the Caribbean, and Asia, and BitCoin

As of  11:30 am AST, 10 December 2020:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78103 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28018 CAD

CAD/USD=0.78103   USD/CAD=1.28018

CNH/USD= 0.15339   USD/CNH=6.51820

EUR/USD= 1.21037   USD/EUR=0.82610

DKK/USD =0.16260   USD/DKK=6.14831

NGN/USD= 0.00260   USD/NGN=379.384

JPY/USD=0.00960   USD/JPY=104.19

INR/USD=0.01356      USD/INR=73.5975

JMD/USD=0.00683    USD/JMD=143.446

GYD/USD=0.00469       USD/GYD= 205.184

GHS/USD=0.17031     USD/GHS= 5.84142

XCD/USD=0.37037        USD/XCD= 2.70

KES/USD = 0.00889     USD/KES= 110.408

BBD/USD = 0.50000     USD/BBD = 2.0000

TTD/USD = .14459         USD/TTD= 6.66797

BTC/USD= 18252.40     USD/BTC= 0.00005

Source: OANDA

Major political/legal event impacting foreign exchange

BIS releases Basel III monitoring results on banks

Today, the Bank of International Settlements Basel III committee released results of its survey determining compliance with bank capital requirements developed in 2010 under the Basel III framework.  The framework was developed in response to the financial crisis of 2008.  The objective of Basel III was to modify bank capital requirements thus leading to less variability in a bank’s risk weighted assets.

The survey announced today found that banks were continuing to make progress toward meeting the Basel III requirements and that bank liquidity ratios pre-Covid have been improving.  

Source: Bank of International Settlements

Unlike West African counterparts, Kenya shows appetite for US dollar …

While the US dollar has been declining against a number of currencies, the Kenya shelling does not appear to be one of them, at least during the first week of December. According to data from OANDA, a foreign exchange brokerage, from the period 1 December through 5 December 2020, the Kenya shelling price of a US dollar increased 0.625% from 109.268 KES on 1 December 2020 to 109.951 KES on 5 December 2020. The current Bank of Kenya exchange rate is 1 USD for 111.0618 KES.

The Kenya shilling price for the euro, British pound, and Chinese yuan also increased during the same period. The euro shilling price ticked up from 131.076 KES to 133.253 KES (1.660%). The pound-shilling price advanced 1.0358% from 146.162 KES to 147.676 KES while the Chinese yuan advanced 1.2936% from 16.6311 KES to 16.8665 KES.

The Kenyan central bank’s inter-bank interest rate is 3.96% while the 91-day treasury bill is yielding 6.86%.

Nigeria price of the US dollar falls versus other currencies.

According to data from OANDA, a foreign exchange brokerage, for the period 1 December to 5 December 2020, the Nigeria price of the US dollar fell 0.060% from 378.373 NGN to 378.145 NGN. The Nigeria price for the euro, British pound, and the yuan saw increases, however. The Nigeria price of the euro increased from 453.889 NGN to 458.285 NGN (0.969%) while the Nigeria price of the British pound increased from 506.130 NGN to 507.890 NGN (0.348%)

During the same period, the Nigeria price of the China’s yuan increased from 57.6594 NGN to 58.0075 NGN (0.604%).

As of 3 December 2020, the Bank of Nigeria reported that its interbank mid-range foreign exchange rate for the U.S dollar was 379.50 NGN while the interbank exchange rate for the euro came in at 460.375 NGN and the price for the British pound was 509.9342 NGN. Meanwhile the interbank foreign exchange rate for the Chinese yuan came in at 57.9137 NGN.

Nigeria’s interbank interest rate as of 2 December 2020 is .50.

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Ghana’s demand for US dollar decreased last week; increased for other major currencies …

Ghana‘s demand for the US dollar appears to have fallen last week. According to data from OANDA, a foreign exchange brokerage, during the period 1 December to 5 December 2020, the Ghana price of a dollar fell from 5.8456 GHS to 5.8280 GHS (-0.301%).

The Ghana price for the Euro climbed from 7.0123 GHS to 7.0631 GHS (0.724%) between 1 December and 5 December. During the same period, the Ghana price of the British pound also increased 0.106% from 7.8194 GHS to 7.8277 GHS. In addition, the Ghana price of the Chinese yuan (offshore) increased 0.356% from 0.8908 GHS to .8940 GHS.

The Bank of Ghana, the nation’s central bank, reported on 4 December 2020 a mid-range interbank rate for the US dollar of 5.7142 GHS. The interbank rate for the Euro came in at 6.9409 GHS while the interbank rate for the British pound chimed in at 7.7082 GHS.

Ghana’s current policy rate is 14.50%, with an inflation target of 6 to ten percent. The current rate of inflation, according to the Bank of Ghana, is 10.1%. The country’s 91-day Treasury note interest rate is at 13.5937%. Ghana’s interbank interest rate is 13.57%.

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