Foreign exchange rates as of 28 March 2022, 1:30 am GMT

Currency Pair28 March 202229 March 202230 March 202231 March 20221 April 2022
EUR/USD1.09834    
GBP/USD1.31766    
USD/CNY6.36526    
USD/CHF0.93015    
USD/NGN415.25    
USD/ZAR14.5272    
USD/AOA449.768    
USD/INR76.011    
USD/JPY122.07    
USD/SAR3.74524    
Dollar Index99.00    
Sources: OANDA, MarketWatch

Interbank Market News Scan: Rupee jumps against the U.S. dollar; bridging the global trade financing gap with Commercial Data Interchange

Interbank, India, rupee. The rupee surged 45 paise to close at 74.62 (provisional) against the U.S. dollar on January 31 supported by positive domestic equities and improved risk appetite. Source: The Hindu. https://www.thehindu.com/business/markets/rupee-jumps-45-paise-to-close-at-7462-against-us-dollar/article38353579.ece

Interbank, Ukraine. The National Bank of Ukraine (NBU) has recorded a decline in currency demand on the interbank foreign exchange market last Friday, according to a press release issued by the central bank, Ukrinform reports. Source: Ukrinform. https://www.ukrinform.net/rubric-economy/3394687-nbu-records-decrease-in-currency-demand-on-interbank-market.html

Interbank, Bank for International Settlements. Eddie Yue makes argument for closing the trade finance gap with better connectivity between digital finance platforms. Source: Bank for International Settlements. https://www.bis.org/review/r220126a.htm

Foreign exchange rates of interest to Atlanta

EUR/USD=1.1148

GBP/USD=1.3398

USD/MXN=20.7989

USD/GTQ=7.5066

USD/NGN=415.160

USD/GHS=6.2239

USD/VND=22,645.0

USD/JPY=115.23

USD/INR=74.9150

USD/BTC=0.00003

USD/ETH=0.00039

Source: OANDA

MarketWatch Dollar Index=96.92

Interbank Market News Scan: Expecting GBP-USD to top 1.3780, but asking why would I want to buy the British pound?

The GBP-USD currency pair has, at the time of this writing, an exchange rate of 1.3812.  Analysis conducted by FXStreet has support for future increased price movement between 1.3640 and 1.3800 and resistance to price increase anywhere between 1.3840 and 1.3900.  Retail traders are more bearish on the currency pair’s price movement which, from what I gather from the analysis, may be contributing to GBP-USD breaching and staying above 1.3800.

Although, as a binary options trader, I focus on what exchange rate a pair will close out at by the end of the day meaning that what little profit I make is based on getting the price movement call correct, I share with most retail traders the desire to see a currency pair climb.  I will always cheer on the attainment of profit because profit equates to the income the trader needs in order to maintain a roof over her children’s heads.  But given the mostly gloomy news out of the United Kingdom, I have been asking myself, why would anyone want to buy the damned pound?

According to data from the Bank of England, inflation in the UK is running at 3.1% while the UK’s Office of National Statistics has gross domestic product growing at an annualized at 5.5%.  The UK government’s ten-year bond is yielding 1.18% and unemployment is at 4.5%.

Contrast UK performance with the United States and at first blush you wonder why exchange US currency for UK currency unless you just need a getaway to visit relatives in London.  The US is experiencing a rate of inflation more than twice the Federal Reserve’s 2% target (5.4% to be exact); is enjoying 6.7% growth in gross domestic product; and has ten-year government bonds yielding 1.65%. 

If anything, it would appear that a trader would borrow pound and make a few bets in the States.  This relative dollar strength may be what is keeping the 1.3800 lid on the GBP-USD.

In the meantime, I am thinking of conducting a comparison of UK consumer baskets to US consumer baskets.  I never hear anyone in the media make this type of comparison.  I think such a comparison would add to the discussion. Let me know what you think.  

Alton Drew

21.10.2021

Interbank market news scan: USD/JPY continues to increase since beginning of Biden administration; Euro continues its uptick as well …

Currency pair20 January 202124 March 2021Percentage change
USD/JPY103.9300108.70004.6
USD/GBP0.73450.7293-.71
USD/CAD1.27311.2568-1.3
USD/EUR 0.82540.84522.4
Source: Reuters

As of 9:18 EST, 24 March 2021

Interbank market news scan: Fed chair opines on necessity for an improved payments system and testing central bank digital currencies…

The Takeaway: Soon after issuing a statement on the fed funds rate and how warranted attention paid to rising yields should be, Federal Reserve Board chairman Jerome Powell remarked today about the need to further strengthen the global payments system with emphasis on its cross border nature. Mr Powell also provided an update on the testing of central bank digital currencies. Stakeholders in the payments system may want to pay attention to how intermediaries are treated in a central bank digital currency regime.

To see what we’re following, follow the links …

Crypto Exchanges: “Bitcoin is the most talked about cryptocurrency but Ethereum [the blockchain] has more features, including being more flexible” in its hosting of decentralized finance (DeFi) than the Bitcoin blockchain, according to Bank of America. Bank of America Sees DeFi ‘Potentially More Disruptive Than Bitcoin’ – CoinDesk

Decentralized Finance: Reputation-based lending is coming to decentralized finance (DeFi) next month with the release of Maple Finance’s “Pool Delegates” lending suite. Maple Finance Raises $1.4M for Its Reputation-Based DeFi Lending Platform (yahoo.com)

Crypto Exchanges: A number of venture capital giants have completed a financing round for Ethereum-based volatility and derivatives protocol Volmex Finance. Volatility derivatives project Volmex Finance attracts backing from VC giants (cointelegraph.com)

Crypto Prices: Bitcoin’s (BTC) price slid Thursday, retreating along with U.S. stocks and oil prices as U.S. Treasury yields touched some of the highest levels in a year. https://www.coindesk.com/market-wrap-bitcoin-loses-steam-60k-bond-yields

Yields: Rising U.S. bond yields will not hurt Asia’s emerging markets as badly as they did during the “taper tantrum” eight years ago, according to a report by S&P Global Ratings. https://www.cnbc.com/2021/03/18/asias-emerging-economies-can-withstand-rising-us-yields-says-sp.html

Central Banks: Both of the Federal Reserve and the Bank of England vowed to keep liquidity plentiful and not to taper support in the face of rising inflation until they see prolonged signs of an economic recovery. The FOMC served up a surprise with the majority of the dots flat through 2023. Both USD and GBP fell sharply after their respective central banks’ decisions before later stabilizing. Fed, BoE step back, yields push up (fxstreet.com)

Payments System: Federal Reserve chairman Jerome Powell offers remarks on improving the payments system. Closing remarks by Chair Powell at a conference hosted by the Committee on Payments and Market Infrastructures – Federal Reserve Board

Currency pairs that include top countries with foreign direct investment in the US …

The majority of foreign direct investment in the United States is held by Japan, the United Kingdom, Canada, the Netherlands, Germany, France, and Luxembourg. Since the Biden administration has taken office, the dollar-yen and dollar-euro have seen appreciation (4.9% and 1.5%, respectively), while the dollar-pound and the dollar-loonie have fallen, 2.4% and 2.3%, respectively.

Currency pair20 January 202119 March 2021Percentage change
USD/JPY103.9300108.99004.9
USD/GBP0.73450.7170-2.4
USD/CAD1.27311.2433-2.3
USD/EUR (1)0.82540.83741.5
Source: OANDA (1) The euro is the currency of France, German, and Luxembourg

18 March 2021, 9:46 pm EST

Interbank market news scan as of 3:32 pm AST: Peso, Indian rupee, and Japanese yen weaken against the dollar

Currency pairsExchange Rate Before Event 1:00pm ASTEventPost EventExchange Rate Post Event
AUD/USD0.7666Federal Reserve announcement0.7681Dollar weakens vs AUD
USD/CAD1.2774Federal Reserve announcement1.2759Canadian dollar strengthens vs US dollar
USD/CNY6.4822Federal Reserve announcement6.4822No change
EUR/USD1.2075Federal Reserve announcement1.2118Dollar weakens vs the euro
USD/INR73.0065Federal Reserve announcement73.0500Indian rupee continues weakness vs US dollar
GBP/USD1.3689Federal Reserve announcement1.3715US dollar weakens vs British pound
USD/JPY104.0000Federal Reserve announcement104.0600Japanese yen showing weakness vs US dollar
USD/MXN20.1832Federal Reserve announcement20.7000Mexican peso weakens against US dollar
USD/DKK6.1554Federal Reserve announcement6.1554No change
USD/NOK8.6452Federal Reserve announcement8.6242Norwegian Krona strengthens vs US dollar
Sources: Federal Reserve, Reuters

Today, Jerome Powell, chairman of the Board of Governors of the Federal Reserve issued the following statement:

“The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

Strategic takeaways:

  1. Traders should take a strategic position in the flow of Federal Reserve decision making on rates with the expectation of continued dollar weakness for some time as the Federal Reserve maintains its flexible average inflation rate policy for the net one to two years.
  2. The Federal Reserve may be growing weary of noting the need for fiscal action on the part of the U.S. Congress or sees no need for making such calls given the gravity of the virus and a Democratic-controlled White House and Congress that appear intent on providing another fiscal injection into the economy.
  3. Traders should expect Congress to authorize additional borrowing to finance additional stimulus. Additional fiscal demand may come at a higher interest rate price for taxpayers. Depending on how government structures the stimulus spending, monies directed to infrastructure and the ensuing contracts entered into to bring about infrastructure spending may attract additional domestic and foreign capital.
  4. The Mexican peso, Indian rupee, and Japanese yen weakened after the announcement. The dollar continued its weakness in its more popular currency pairs: the EUR/USD and the GBP/USD. The Chinese yuan remained unchanged expectedly given the People’s Bank of China’s recent announcement on their currency’s value.

The Africa Play …

This morning I decided to take a look at how the U.S. dollar is faring this week against the Ghanaian, Nigerian, and Kenyan currencies in comparison to the Swiss franc, Chinese yuan (offshore), and the British pound. In my opinion the United States hasn’t demonstrated that it wants to be a significant trading partner with the African continent, but with a new administration and China’s well documented economic forays on the Continent, that may change.

Pairs4 January 20215 January 20216 January 20217 January 2021Notes
CNH/KES16.787916.840516.837316.8373.3% increase in exchange rate
USD/KES108.391108.461108.500108.500.1% increase in exchange rate
GBP/KES147.768147.472147.723147.723Flat
CHF/KES122.931123.285123.497123.497.5% increase in exchange rate
Source: OANDA
Pairs4 January 20215 January 20216 January 20217 January 2021Notes
CNH/NGN59.620659.264058.808258.80821.3% decrease in exchange rate
USD/NGN384.938381.690378.964378.9641.5% decrease in exchange rate
GBP/NGN524.784518.974515.960515.9601.7% decrease in exchange rate
CHF/NGN436.578433.856431.344431.3441.2% decrease in exchange rate
Source: OANDA
Pairs4 January 20215 January 20216 January 20217 January 2021Notes
CNH/GHS0.90640.90940.90740.90740Flat
USD/GHS5.85245.85695.84735.84735Flat
GBP/GHS7.97857.96357.96127.96118.2% decrease in exchange rate
CHF/GHS6.63756.65746.65566.65558.3% increase in exchange rate
Source: OANDA

Federal Reserve releases select exchange rates as of 11 December 2020

Atlanta 14 December 2020, 9:43 PM EST

The Board of Governors of the Federal Reserve System today released the foreign exchange rates for the following foreign exchange pairs. Compare with exchange rates quoted by foreign exchange broker OANDA as of 9:59 PM EST:

Federal Reserve OANDA

EUR/USD = 1.2112 EUR/USD = 1.21443

GBP/USD = 1.3197 GBP/USD = 1.33503

USD/CAD = 1.2767 USD/CAD = 1.27508

USD/JPY = 103.880 USD/JPY = 103.93