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Naira trades flat against dollar

By on April 16, 2014

The naira traded flat against the United States dollar yesterday as dealers said  lenders sold dollars on the interbank market to improve liquidity and  shore up the weakening local currency.

The naira had initially weakened to N161.30 in mid-day trade before some lenders started to sell the greenback on behalf of offshore clients participating in the bond market, Reuters  said.

In addition, the local unit of Addax sold $10 million. The move helped the naira recover to close flat at N161.05, compared to last Friday’s close of N161.

“We don’t expect any major move in the naira this week as demand slows and offshore dollar flows into the market,” one dealer said, noting that the unit could trade around N160-N161.50 throughout the week.

The naira has hovered around N160.90-N161 over the past week with renewed interest from offshore investors in Nigeria’s debt.

Also, the Nigerian National Petroleum Corporation sold large amounts of dollars to increase liquidity.

Meanwhile, Brent crude oil rose more $1.50 yesterday as Western powers considered tougher sanctions against Russia over its actions in Ukraine, while U.S. crude rose modestly after positive retail sales data signaled a rebound in the American economy.

According to Reuters, several European Union foreign ministers threatened Moscow with new sanctions and France’s foreign minister said the group could hold an emergency summit next week if there is no breakthrough in talks involving Russia, Ukraine and the United States that are scheduled for Thursday.
Brent prices rose by as much as $1.79 after the Pentagon announced a Russian fighter aircraft made repeated low-altitude, close-range passes near a US ship in the Black Sea over the weekend.

US retail sales logged their biggest gain in March, the latest sign the economy is accelerating after its weather-induced winter slumber, lending support to US crude oil prices.

Brent’s premium over US crude oil narrowed on Friday to $3.28, its tightest point since September 20, causing sell-off pressure in US crude, analysts said. The spread was last trading at $4.76.

Investors awaited fresh economic growth data from China, the world’s second-biggest oil consumer.

In a Reuters’ poll, economists forecast that growth slowed to 7.3 percent in the first quarter from 7.7 percent in the final quarter of 2013. This would be the slowest pace of growth in five years and near the minimum needed to ensure stable employment

 

 

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