As of 2:06 am AST, a week that may see impeachment so far has no impact on currencies …

PairsFederal Reserve as of 8 January 2021OANDA as of 11 January 2021OANDA as of 13 January 2021 2:06 am AST
GBP/USD1.35831.35031.3588
USD/CAD1.26981.27691.2751
USD/CNH6.47506.47826.4582
USD/DKK6.06976.11156.1137
EUR/USD1.22521.21671.2165
USD/INR73.310073.409373.2619
USD/MXN19.941020.120319.9592
USD/JPY103.8900104.1600104.1100
USD/NOK8.40748.51598.5070
USD/SEK8.20858.28078.2834
USD/CHF0.88430.88920.8893
USD/BTC0.00000.0000
USD/ETH0.00090.0009
Sources: Federal Reserve, OANDA

House votes resolution asking Pence to use 25th amendment to remove Trump

Last night the U.S. House of Representatives passed the following House resolution in its attempts to remove President Donald Trump prior to the end of his term. House Res 21 reads as following:

This resolution calls upon Vice President Michael R. Pence (1) to immediately use his powers under section 4 of the Twenty-fifth Amendment to convene and mobilize the principal officers of the executive departments to declare that the President is unable to successfully discharge the duties and powers of his office, and (2) to transmit to the President pro tempore of the Senate and the Speaker of thHouse notice that he will be immediately assuming the powers and duties of the office as Acting President.

Vice-President Pence has reportedly said that he does not intend to invoke the 25th Amendment. This means that the House will likely move to the next stage of its strategy which is to vote articles of impeachment against Mr Trump. Given the Democrats majority in the House, passage is expected.

The articles of impeachment would then move to the Senate for a trial. Indications are that, unlike last year’s attempt to remove the President from office via impeachment where a Republican-controlled Senate voted not to remove the President, there may be enough support on the part of Senate Republicans to find Mr Trump liable for “high crimes and misdemeanors”, the standard under the U.S. Constitution for removal. Senate majority leader Mitch McConnell has signaled that Mr Trump’s behavior, where allegedly encouraged supporters to march last week on the Capitol, amounted to an impeachable offense.

The establishment wing of the Republican Party, now in damage control as a result of the storming of the Capitol by Trump supporters and the resulting deaths of five people, would like nothing more than to move on from the Trump era and start laying the groundwork for the 2022 mid-term elections.

I don’t expect impeachment actions to have any bearing on pending policy actions designed to impact the economy. With only seven days left until the change in government, attempts to remove Mr Trump are designed to score political points with an electorate, a significant amount of whom believe the actions of individuals storming the Capitol amounted to an insurrection attacking the country’s representative institutions of democracy.

As of 10:59 am AST, dollar shows some strengthening as yields increase

PairsFederal Reserve as of 8 January 2021OANDA as of 11 January 2021OANDA as of 12 January 2021 10:59 am AST
GBP/USD1.35831.35031.35026
USD/CAD1.26981.27691.2769
USD/CNH6.47506.47826.4782
USD/DKK6.06976.11156.1115
EUR/USD1.22521.21671.2167
USD/INR73.310073.409373.4093
USD/MXN19.941020.120320.1203
USD/JPY103.8900104.1600104.1600
USD/NOK8.40748.51598.5159
USD/SEK8.20858.28078.2807
USD/CHF0.88430.88920.8892
Sources: Federal Reserve, OANDA
RatesFederal Reserve as of 8 January 2021Bloomberg as of 12 January 2021 10:59 am AST
Federal Funds Rate0.090.08
Prime Rate3.253.25
3-month Treasury0.080.08
2-year Treasury0.140.15
10-year Treasury1.131.17
30-year Treasury1.871.89
Sources: Federal Reserve, Bloomberg

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

US waits for Senate election results from Georgia; strength of US dollar against European, African currencies a mixed bag …

PairsOANDA as of 4 January 2021OANDA as of 6 January 2021Notes
USD/KES108.391108.461Dollar flat
USD/NGN384.938381.690Dollar weakening
USD/GHS5.85245.85693Dollar flat
USD/CDF1950.611950.01Dollar flat
USD/AOA648.310649.149Dollar flat
USD/ZAR14.630914.8552Dollar strengthening
Source: OANDA

Meanwhile, as the count in Georgia comes to a close, yields on longer term notes begin to increase as the Senate gets closer to a 50-50 split and the likelihood of more spending under a Biden administration ….

RatesFederal Reserve as of 4 January 2021Bloomberg as of 6 January 2021 10:30 am AST
Federal Funds Rate0.090.08
Prime Rate3.253.25
3-month Treasury0.090.08
2-year Treasury0.110.13
10-year Treasury0.931.02
30-year Treasury1.661.78
Source: Federal Reserve, OANDA

And the buzz phrase again mid-week is dollar weakening as exchange rates for a number of foreign exchange pairs continues to fall. This in light of disappointing jobs numbers from ADP where the payroll company determined that 123,000 jobs were lost in December 2020.

PairsFederal Reserve as of 4 January 2021OANDA as of 4 January 2021OANDA as of 6 January 2021 10:45 am AST
GBP/USD1.36621.36331.35967
USD/CAD1.27531.27261.27269
USD/CNH6.52506.45526.43929
USD/DKK6.08396.06576.05823
EUR/USD1.22301.22641.22774
USD/INR73.010072.936773.0696
USD/MXN19.892019.838219.9091
USD/JPY103.1900103.02102.36
USD/NOK8.57578.53008.50760
USD/SEK8.20958.20918.20299
USD/CHF0.88410.88150.87959
Source: OANDA

As of 9:59 an AST, foreign exchange in holding pattern as the United States watches the U.S. senate run-offs in Georgia

PairsFederal Reserve as of 4 January 2021OANDA as of 4 January 2021OANDA as of 5 January 2021
GBP/USD1.36621.36331.36329
USD/CAD1.27531.27261.27260
USD/CNH6.52506.45526.45524
USD/DKK6.08396.06576.06566
EUR/USD1.22301.22641.22636
USD/INR73.010072.936772.9367
USD/MXN19.892019.838219.8382
USD/JPY103.1900103.02103.02
USD/NOK8.57578.53008.53002
USD/SEK8.20958.20918.20912
USD/CHF0.88410.88150.88150
Board of Governors of the Federal Reserve, OANDA

Regulatory news impacting foreign exchange

None at this time…

The US dollar weakens in Jamaica along with the pound and yuan …

According to data from OANDA, a foreign exchange brokerage, the US dollar has showed slight weakness when compared to the Jamaica dollar. During the period 1 December to 5 December 2020, the US dollar priced in Jamaica dollars fell 0.950% from 145.195 JMD to 143.815 JMD. The British pound did not fare much better, falling .5456% from 194.220 JMD to 193.160 JMD.

The Jamaica dollar price for the China yuan fell .292% from 22.1260 JMD to 22.0613 JMD.

The JMD-priced euro saw some gain, climbing in price by .069% from 174.173 JMD to 174.294 JMD.

The inter-bank rate has held at .50% since August 2019 with the Bank of Jamaica targeting an inflation range of four to six percent.

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%.

Buying a piece of America from abroad? Here are your rates….

As of 9:04 am EST 22 October 2020, here are your exchange rates from selected countries:

1 Euro = $1.19 USD

1 Kwanza= $0.0015 USD

1 Rand= $0.061 USD

1 Naira= $0.0026 USD

1 Rupee= $0.014 USD

1 Shilling= $0.0092 USD

1 Yuan= $0.15 USD

1 Eastern Caribbean Dollar= $0.31 USD

Source: Morningstar