E-Financial
FXTM Analysis: FXTM June Major Assets Roundup
Pushed to the cliff’s edge over the last six months of speculation and negative sentiment, the GBPUSD finally toppled off the verge on June 24th, the day after the Brexit vote was confirmed.
Plunging to levels last seen in 1985 during the ensuing panic sell-off, the GBPUSD fell to the level of 1.3234 from a high of 1.4974 earlier in the month.
Although the UK is not in the Eurozone, the implications of the wider European Union economic bloc without the UK partnership has also impacted heavily on the Euro.
The EURUSD fell from a high of1.135 mid-month to a low of 1.099 after the vote, while the GBPEUR dived steeply from a high of 1.3132 to a low of 1.1991. UK travellers are expected to find their Sterling cash worth much less across most major exchange rates, at the very least for the short-term.
The Gold price soared amid the uncertainty, taking off from $1260/ounce on June 23rd to over $1330 by June 24th. Investors stayed true to form during the market crisis, and rushed to buy up the safe-haven asset, while selling off the ones with higher risks.
Black gold – WTI Crude Oil – was also caught up in the sell-off, dropping to a low of $47/barrel from a high of $52 in the immediate aftermath of the Brexit shock.
The storm’s epicentre may have been the UK, but it spread fast and furiously across the world markets. Emerging market currencies suffered short-term wave crests in the storm before stabilising.
The USDIDR bucked from 13,333 to 13,550, throwing off the calming reins placed by Bank Indonesia’s new measures, namely an interest rate benchmark of 5.5 percent.
Due to the risk aversion in the markets and sudden loss of risk appetite following the unexpected shock from the EU referendum result, all of the emerging market currencies declined with this including the Indonesian Rupiah.
The reason was not too due to Brexit outcome having a direct impact on the local economy, but because reduced risk appetite encourages investors to be less attracted towards the emerging markets.
The local currency has since then regained losses, however it is possible that global economic uncertainty will linger for some time following this vote and this would mean there could be risk aversion in the markets at a later date.
The news of a possible tax cut is going to dominate the news locally within Indonesia, with the advantage to such an initiative being that the government is clearly trying to ease disposably income in the hope of higher domestic spending.
Of course and like the regular easing from the Bank Indonesia, these initiatives are targeted to improve domestic spending and GDP growth at a time where the economy is slowing down due to external risks.
The Ringgit blinked in shock as well. The USDMYR jumped from 3.9500 to 4.0900 in the immediate aftermath of the Brexit.
The volatility smoothed out somewhat thanks to Malaysian Prime Minister NajibRazak’s timely statement. The PM said that he did not expect that the Brexit would have a significant impact on the Malaysian economy, and that fiscal reforms would continue to be furthered.
The Malaysian Ringgit has been on a wild rollercoaster as of late, suffering steep losses as a result of the EU referendum shock to then regain all momentum around one week after the outcome. The EU referendum outcome is going to lead to a period of uncertainty in the markets that is likely to fuel risk aversion at a later stage, which in turn could negatively impact the Malaysian Ringgit.
It is still very difficult to pinpoint which direction the local currency is heading in next, and it should be remembered that the Federal Reserve have still not publically commented on how this could impact US interest rate policy.
The bright side to this is that if the Fed do postpone any possibility of future rate rises, then it might pull investors back towards the emerging markets where there is the benefit of higher interest rates.
The USDCNY was jolted from 6.5800 to 6.6900. It was to be expected that China’s currency could face challenges in the wake of the Brexit, but on the other hand, there is also speculation that China’s stock markets and larger business centres could gain some business if it starts flowing out of London.
The UK’s capital is expected to lose some power as a worldwide business and financial centre, mainly because of the gigantic tangle of legal and trading uncertainties presented by the Brexit.
The CNY is continuing to play down the expectations,as we believed it would do as the second half of the year approached.
The period of uncertainty now in the markets, following the EU referendum shock is going to plague risk appetite, which will be negative for the emerging markets and no EM is alone in withstanding this threat.
There are concerns in the short term that the China economy could be negatively impacted by the UK leaving the European Union, mainly because it is clear that the two governments have formed very close ties over the past two years and any loss of UK stability could impact the UK economy and its ability to maximize China relations.
The bright spot is however that the UK is now going to be forced to diversify trade relations outside of the EU, which is obviously going to present opportunities for the emerging markets because this is one area of the UK economy you would think would be reached out towards.
Obviously, if China has now developed strong relations with the UK then this could work out to their advantage at a later stage.
For the UAE’s Dirham, the main story was the GBPAED exchange rate, which fell from 5.5110 to 4.841 overnight just after the Brexit vote.
The ramifications could include cheaper exports from the UK to the UAE, but more barriers to travellers from the UK to GCC countries, given the stronger AED versus the Pound.
One possible benefit however is that the Brexit has triggered new impetus towards the idea of a free trade area between the UAE and the UK.
I think the plunge in the GBP exchange rate must be very pleasing news to any UK expatriate living in the Emirates right now. Of course, there is the positive aspect that any UAE company could now exploit and import products from the UK at a cheaper price, which might be encouraging to GDP prospects via higher imports at a time when GDP growth will be slipping lower due to depression in the price of oil.
I remain unsure how much further the GBP could fall against the AED in the medium term, not necessarily because there is any reason to be positive on the British currency, but because I don’t think the Federal Reserve are going to be in any position to begin raising US interest rates anytime soon. Any Dollar pressure is likely to lead to AED weakness, due to its peg against the USD.
Looking ahead to July, the market fallout from the Brexit vote is set to dominate, and risk appetite appears to be due for a diet of Gold and short-term profit-taking.
Securities and Exchange Commission (SEC) has commenced a nationwide enlightenment campaign to help Nigerians recover unclaimed dividends and other monies arising from capital market transactions.
The campaign, which began with a town hall meeting in Lagos on Thursday, is aimed at sensitising investors on the existence of unclaimed monies, the role of the National Investor Protection Fund (NIPF) and the procedures for verifying and recovering legitimate claims.
Emomotimi Agama, director-general of SEC, who was represented at the event by Hafsat Rufai, director, Registration and Exchanges, Market Infrastructure Department, said the initiative was necessary to ensure that funds belonging to investors were returned to their rightful owners.
Agama said unclaimed monies administered by the NIPF included return monies from public offers, scheme consideration from mergers, acquisitions and corporate restructuring transactions, as well as other funds belonging to investors that had remained unclaimed.
He noted that the Commission considered it unacceptable for investors’ funds to remain unclaimed, adding that many investors and their families were either unaware that such monies existed or did not know the procedures for recovering them.
Agama said the SEC Board had approved a nationwide public enlightenment campaign to sensitise Nigerians on unclaimed monies, the role of the NIPF and the process for making legitimate claims.
He said the Lagos programme marked the commencement of the outreach, which would subsequently cover the six geopolitical zones and the Federal Capital Territory.
The director-general said the campaign would also address the transmission of securities following the death of an investor, noting that families were often unaware that their deceased relatives owned shares or other capital market investments.
He said even when beneficiaries were aware of such investments, many lacked knowledge of the legal and administrative procedures required to obtain probate or letters of administration and transmit the investments to the rightful beneficiaries.
Agama said the Lagos programme included an expert session on probate administration and the transmission of securities to demystify the process and provide practical guidance to investors and their families.
He urged investors to maintain proper records of their investments and encouraged families to take steps to preserve inherited wealth.
The SEC DG also warned Nigerians against Ponzi schemes and other fraudulent investment arrangements, saying fraudsters continued to exploit economic pressures and digital platforms to lure unsuspecting members of the public with promises of guaranteed and unusually high returns.
He urged the public to be cautious of investment opportunities offering risk-free returns, stressing that investor education and vigilance remained critical to combating financial fraud.
Speaking on behalf of Lawal Pedro, attorney-general and commissioner for Justice,Lagos State, Olujoke Ogunojemite, deputy director in the Ministry of Justice, commended the SEC for extending the campaign to Lagos and recognising the role of legal institutions in resolving issues relating to unclaimed dividends and other assets.
She said the issue had a practical impact on beneficiaries who were unable to access assets after the death of their loved ones.
Ogunojemite said the ministry was committed to ensuring that legal processes did not become barriers to beneficiaries seeking to recover legitimate assets.
She described the SEC’s outreach as commendable, saying it would help restore assets to their rightful beneficiaries.
World Bank has said that despite nearly three years of economic reforms by the federal government, about 79 per cent of Nigerians remain poor or vulnerable to falling into poverty.
The bank stated this in its newly approved Country Partnership Framework for Nigeria, covering 2026 to 2032, and its accompanying Streamlined Country Diagnostic.
The report which highlighted the country’s deepening social and economic challenges, indicated that while recent macroeconomic reforms have helped stabilise the economy and restore investor confidence, the benefits have yet to translate into meaningful improvements in living standards for most Nigerians.
The World Bank noted that the seven-year strategy seeks to support Nigeria’s ambition to create more and better jobs through private-sector-led growth while accelerating poverty reduction.
According to the Streamlined Country Diagnostic document, “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”
The World Bank pointed out that Nigeria’s economic performance over the past decade had been constrained by structural rigidities, policy missteps, dependence on crude oil, and repeated external shocks, leaving millions trapped in poverty.
It stated that about 139 million Nigerians currently live below the national poverty line, with poverty concentrated largely in the northern part of the country.
The report also noted that more than 86 million Nigerians remain without electricity, while three to four million young people enter the labour market every year with limited employment opportunities.
It added that sustaining macro-fiscal and structural reforms would be critical to reducing inflation, expanding fiscal space and ensuring that recent economic stabilisation translates into improved living standards.
According to the report, the reforms have begun to improve macroeconomic indicators.
Economic growth increased from 3.5 per cent in the first half of 2024 to 3.9 per cent during the corresponding period of 2025, foreign reserves exceeded $42bn, fiscal deficits narrowed, and investor confidence strengthened.
However, it warned that high inflation continues to undermine household incomes. The report stated, “High inflation, though declining, continues to erode real incomes, particularly for the poor. Social protection efforts to support the most vulnerable have been slow and uneven in their rollout.”
The World Bank added that although the reforms helped Nigeria avoid a more severe economic crisis, institutional weaknesses, weak policy coordination, and inadequate budget transparency continue to pose significant risks.
It warned that sustained reform implementation, backed by deeper structural measures, would be required to improve Nigeria’s medium-term economic outlook.
Under the new Country Partnership Framework, the World Bank said job creation would serve as the primary pathway for reducing poverty.
The report explained that international experience from countries such as India, Indonesia, and China shows that moving people into productive employment remains the most effective tool for reducing poverty.
To achieve this, the framework will prioritise labour-intensive sectors, particularly agriculture and micro, small and medium enterprises, while addressing structural deficiencies in electricity, digital infrastructure, education and healthcare.
The Nigeria Revenue Service (NRS) said the rollout of electronic invoicing (e-invoicing) will strengthen tax compliance, curb revenue leakages and improve transparency in tax administration as it moves to fully digitise the country’s tax system.
The Project Lead, NRS e-Invoicing Project, Mohammed Bawa, stated this at the DigiTax E-Invoicing Compliance Breakfast Session held in Lagos.
The event, organised by DigiTax, an NRS-accredited e-invoicing platform, formed part of efforts to support the agency’s ongoing education and sensitisation campaign on the e-invoicing mandate.
Bawa said the initiative aligns with global trends in tax digitization and is expected to help improve Nigeria’s tax-to-GDP ratio, which remains one of the lowest in Africa.
According to him, the system will provide the NRS with greater visibility into transactions across sectors, formalise activities within the informal economy and standardise invoice formats nationwide using globally recognized invoice schemas.
He added that e-invoicing would improve operational efficiency for both businesses and tax authorities while supporting the NRS’ transition from manual and electronic tax administration processes to a fully automated system-to-system interaction model.
Bawa noted that the legal framework for implementation is backed by the Nigeria Tax Administration Act, which prescribes penalties for non-compliance.
He disclosed that the NRS has completed onboarding large taxpayers and is preparing to enforce compliance with defaulting entities.
According to him, medium taxpayers are expected to begin compliance in the third quarter of 2026, while onboarding of emerging taxpayers will commence in 2027, with full adoption targeted for all taxpayers by the end of 2028.
Bawa urged taxpayers yet to be onboarded onto the platform to begin the process and work with accredited service providers to ensure compliance.
Speaking at the event, Country Director of DigiTax Nigeria, Olumide Akinsola, urged businesses to look beyond their internal systems and assess the compliance status of suppliers and counterparties.
He warned that businesses whose suppliers fail to transmit invoices through the MBS platform risk losing eligibility to claim Value Added Tax (VAT) input credits on such transactions, describing the resulting supply chain exposure as a significant commercial risk that many organisations have yet to quantify.
Akinsola also announced the launch of DigiTax’s white paper, ‘The State of E-Invoicing Readiness in Nigeria,’ which examines compliance adoption trends and the readiness gap across different taxpayer segments.
He added that DigiTax operates in Nigeria, Kenya, Zambia and the United Arab Emirates (UAE), noting that experience from those markets shows businesses that integrate early are better positioned to avoid disruptions when enforcement begins.
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