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Trump Rally to Be Tested by Healthcare Vote

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FXTM Research Analyst Lukman Otunuga comments on Sterling has staged a remarkable rebound this week with bulls almost rebelling against the Brexit woes by propelling the GBPUSD above 1.2500 during Thursday’s trading session.

A growing sense of caution has gripped the financial markets this week with investors on standby ahead of Thursday’s key healthcare vote in Congress which may thoroughly test the Trump bump.

Uncertainty over Donald Trump’s proposed economic agenda has already triggered risk aversion and any complications in the healthcare reform could spell trouble for this phenomenal stock market rally. Global stocks may be exposed to downside shocks with the threat of a potential setback in the healthcare bill raising doubts over Trump’s ability to move forward with the proposed tax cuts and infrastructure spending. Today will be the first major test for Trump’s legislative ability and the outcome may either create a Trump slump or technical bounce for bulls to exploit.

Sterling Hovering Around 1.2500
Sterling has staged a remarkable rebound this week with bulls almost rebelling against the Brexit woes by propelling the GBPUSD above 1.2500 during Thursday’s trading session. The Dollar’s persistent weakness combined with February’s blockbuster retail sales figure of 1.4% may have created an illusion of a bullish bias returning to Sterling.

Although the retail sales figure for February was unquestionably impressive and illustrated strong growth, the underlying three-month view from December and January still displayed a slowdown.

With the Article 50 set to be triggered next week and the focus redirected towards Brexit, Sterling could be instore for a messy rollercoaster ride.

The lingering concerns over complications arising in the negotiation process may compound to the jitters consequently exposing Sterling to downside risks.

While bulls may be commended on their ability to exploit Dollar’s weakness and elevate Sterling repeatedly despite the Brexit anxieties, questions may be asked over how much steam the over-extended technical bounce has left. With uncertainty still the name of the game when dealing with Sterling, there remains a likelihood of the Brexit developments dictating where the currency trades with macro fundamentals becoming secondary.

From a technical standpoint, Sterling bulls may win the battle this week if 1.2500 is conquered. A decisive breakout and daily close above 1.2500 could open a path towards 1.2600. On the other hand, if 1.2500 remains defensive then bears have a chance to test Wednesday’s daily low at 1.2420.

Yellen Conference In Focus
King Dollar was on the back foot this week with the Dollar Index struggling to break back above 100.00 as sellers exploited the renewed Trump jitters to attack prices incessantly. Dollar bulls remain on the hunt for inspiration to pump life into the Greenback with Yellen’s speech today at a Community Development Conference seen as an opportunity.

If Yellen dishes a hawkish surprise or any fresh insights on rate hike timings, then bulls could be encouraged to elevate the Dollar Index back towards the psychological 100.00 level. On the other hand, if bulls are left empty handed then the Greenback could be instore for further punishment in the short term.

Commodity spotlight – Gold
The risk-off trading environment has boosted appetite for safe-haven assets with Gold becoming an investor’s popular choice this week. Prices have climbed to a three-week high above $1250 with Dollar weakness fueling the upside momentum.

Although Gold may find itself under pressure in the longer term when the Dollar stabilizes, risk aversion could uplift the yellow metal higher in the short term.

From a technical standpoint, the fact that bulls have conquered $1240 on the daily charts suggests that the upside still has some steam. A decisive breakout above $1250 may open a path towards $1260.

 

 


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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