Exchange rate shows record gain at black market as pressure mounts on currency speculators – Nairametrics

Exchange rate shows record gain at black market as pressure mounts on currency speculators – Nairametrics

The US dollar is set to register its fourth consecutive monthly decline on Monday, its longest losing streak since mid-2017. This slide was triggered by strengthened geopolitical risks and the recent strategy by the U.S Federal Reserve in allowing high inflation.

What we know: The U.S. Dollar Index, which tracks the greenback against a list of other major currencies, down by 0.08% to trade at 92.308 at the time of this report.

The latest speech by Federal Reserve Chair, Jerome Powell revealed an accommodative shift in the central bank’s approach to inflation increasing pressure on the U.S dollar as global investors interpreted it that U.S interest rates could stay lower for a longer period of time.

READ: Week the bears took control of the world’s financial Markets

Quick fact: The U.S. Dollar Index tracks the greenback against a basket of major global currencies such as the Japanese yen, British pound sterling, Swedish Krona, Euro, etc. Individuals hoping to meet foreign exchange payment obligations via dollar transactions to countries like Europe, and Japan, would need to pay more dollars in fulfilling such payment obligations.


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Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics discussed the present macros, that has made the U.S dollar, retain its bearish trend relatively. He said;

“The US dollar is weaker as traders placed a very dovish spin of the Fed shift to inflation targeting. Surprisingly on Friday, the giant swing lower occurred in Asia, suggesting USD bearish positioning in Asia was lighter, and so with the Jackson hole “event” out of the way, the USD selling resumed.

READ: If you had $100,000 in cash, where would you invest it in US markets?

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“Inflation in the Fed’s preferred measure has averaged only 1.5% over the last decade, and high unemployment should keep price pressures relatively low over the near-term, triggering the USD sell signal. This, despite the key dollar sell signals not flashing as US real yields rose, so it is likely the lower for a longer narrative that is music to the dollar bears ears.”


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