See Exchange Rate Tonight As Naira Hit All-Time Low

Naira continues to fall in the parallel market as demand continues to regularly exceed supply. Forex traders are selling at N1045/$ to the dollar, suggesting this is due to growing scarcity.

Consequently, the naira has lost more than 40% against the US dollar since the mid-June devaluation.

Although the measures were aimed at improving the country’s financial and foreign accounts, the inflationary impact was short-lived.

Furthermore, the dollar index, a measure of the US currency against its six rivals, was at 105.64, not far from 105.55, its lowest since September 25.

See Exchange Rate Tonight As Naira Hit All-Time Low

Later in the day, US economic news will include Consumer Price Index data.

The cautious tone is reinforced by a mixed report on producer prices in the US, which rose more than expected in September amid rising energy and food costs.

However, underlying inflationary pressures driving factory output continue to ease.

The report comes ahead of Thursday’s release of US consumer price index data for September, which is expected to show moderate inflation last month.

A surprise drop in inflation would likely support the argument that the Fed has ended its tightening cycle, pushing US bond yields and the dollar lower.

On the other hand, a bullish surprise would likely encourage markets to adjust upward the odds that the Federal Open Market Committee will implement an expected 25 basis point increase.

According to the minutes released on Wednesday, Fed officials emphasized that uncertainties regarding the economy, oil prices, and financial markets supported;

“the case for carefully determining how much additional policy tightening may be appropriate. Rising bond rates have been mentioned by Fed members as a factor that might allow them to stop the rate-hike cycle in recent remarks”.

The CME FedWatch tool highlighted that the futures markets are pricing in a 26% chance of a 25-basis point hike at the December meeting and a 9% chance of a 25-basis point hike at the November meeting.

The dollar’s recent weakness has been driven by falling Treasury yields as bond prices rose following the Fed’s softer stance on future rate hikes.

BY IYABO AINA

Publisher Of News Rain Nigeria