Foreign Exchange (FX) Market Analysis for Week Ended June 4, 2021

Forex
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Monday, June 07 2021 / 07:00 AM / by FMDQ/ Header Image Credit:  Financial Yard

 

Below is the commentary on the Foreign Exchange (FX) market with data for the week-ended June 4, 2021. The table following the commentary shows Spot FX weekly turnover for trades between banks (FMDQ Dealing Member (Banks) [DMBs]/Authorised Dealers) and their clients for the week ended May 28 & June 4, 2021.

 

  • In the FX Spot, Forwards and Futures markets, the total turnover for the week-ended June 4, 2021, was $1,069.71 million, representing a decrease of 14.49% ($181.26 million) from $1,250.97 million reported for the week-ended May 28, 2021. The week-on-week (WoW) decrease in turnover was driven by the 24.75% ($222.62 million) decrease in the FX Spot turnover. (See Table 1 below)
  • The WoW increase in FX Derivatives turnover was driven by the increase of 59.39% ($113.05 million) in FX Futures turnover, resulting in an increase in FX Derivatives' contribution to total FX market turnover, by 14.22 Percentage Points to 28.10% from 13.88% recorded in the previous week
  • In the Investors' & Exporters' (I&E) FX Market, the total value of transactions for the week-ended June 4, 2021, was $676.80 million, representing a decrease of 24.75% ($222.62 million) from $899.42 million traded in the week-ended May 28, 2021   

 Table 1: Weekly FX Turnover Analysis

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  • For the week-ended June 4, 2021, the weekly average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/N410.74 compared to $/N410.91 recorded in the previous week-ended May 28, 2021, representing an appreciation of the Naira against the United States (US) Dollars by $/N0.17   

 

  • In the Bureau-de-Change (BDC) market, the Naira depreciated against the US Dollars by $/N8.00 to close the week-ended June 4, 2021, at an average rate of $/N495.00, representing a 1.64% depreciation when compared to $/N487.00 recorded in the previous week, resulting in a spread of $/N84.26 between the weekly average BDC rate and NAFEX rate. (See Table 2 below)

 

Table 2: Weekly FX Rate Analysis

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  • In the FX Futures market, $303.40 million worth of FX Futures contracts were traded in four (4) deals, representing a WoW increase of 59.39% ($113.05 million) when compared to $190.35 million traded in twenty-two (22) deals recorded in the week-ended May 28, 2021

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