Economy
Dollar drops as risk appetite improves
The safe-haven U.S. dollar fell on Thursday as risk sentiment improved after data showed that U.S. jobless claims fell in the latest week, while dire gross domestic product figures met expectations.
The U.S. economy contracted at its sharpest pace since World War II in 2020 as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty.
The Labour Department said separately that initial claims for state unemployment benefits totalled a seasonally adjusted 847,000 for the week ended Jan. 23.
That was down 67,000 from the prior week, but claims remain well above their 665,000 peak during the 2007-09 Great Recession.
“Incoming U.S. data was supportive of risk-taking levels, with Q4 GDP rising close to expectations and jobless claims falling more than expected,’’ said Ronald Simpson, managing director, global currency analysis at Action Economics.
U.S. stocks also rebounded on Thursday from sharp losses in the prior session as earnings season got off to a strong start and fears eased around hedge funds selling long positions to cover shorts.
The dollar index fell 0.26 per cent on the day to 90.429.
It earlier rose to 90.859, while riskier currencies including the Australian dollar dropped to one-month lows.
The greenback was boosted by safety buying earlier this week on concerns that U.S. fiscal stimulus will not be as large as originally hoped and due to the continuing spread of COVID-19 as countries struggle to roll out vaccines.
The U.S. currency has also rebounded from three-year lows reached earlier this month on the view that last year’s decline ran too far too fast.
“There’s such a tug of war right now between the longer-term momentum…and the shorter-term term phenomenon of maybe a dollar short squeeze,’’ said Erik Nelson, a macro strategist at Wells Fargo in New York.
The dollar index is up 0.50 per cent this month after falling 6.75 per cent last year.
The Australian dollar gained 0.42 per cent to $0.7695, after earlier falling to $0.7590, the lowest since Dec. 29.
The greenback fell 0.97 per cent against the Norwegian crown to 8.578, after earlier rising to a one-month high of 8.7286
This week investors also have been rebalancing portfolios for month-end, which has boosted demand for the U.S. currency.
“Of late, it’s really been a position rebalance story,’’ said Bipan Rai, the North American head of FX strategy at CIBC Capital in Toronto.
“The market’s still pretty short dollars.’’
The euro has also been dented as European Central Bank (ECB) policymakers step up their mentions of the euro, with the most recent comments indicating that the ECB could cut its deposit rate to check the strength of the continent’s shared currency.
“We’re starting to hear more rhetoric from the ECB that leads me to believe that they’re going to be a little bit more active with respect to euro appreciation,’’ said Rai.
The euro gained 0.19 per cent to $1.2136, after earlier falling to $1.2079.
Bitcoin rose 8.21 per cent to $32,915, after briefly dipping below $30,000 on Wednesday.
By Sodiq Adelakun
Inflation in Nigeria continued to rise for the twelfth consecutive month in December, with the headline inflation rate reaching 28.92%, up from 28.20% in November.
The National Bureau of Statistics released its consumer price index report on Monday, revealing the ongoing impact of inflation on the country’s economy.
More details to come…
The Nasarawa State House of Assembly has announced the first reading of a bill aimed at regulating private schools and tertiary institutions in the state.
The bill, titled “A Bill for a Law to Regulate the Establishment and Operation of Private Nursery, Primary, Secondary Schools and Tertiary Institutions in Nasarawa State and Other Matters Connected Therewith,” was introduced during the House proceedings on Monday in Lafia.
In addition to this bill, the House also passed two executive bills that focus on promoting education and skills training in the state.
The bills, if passed into law, are expected to enhance the quality of education and boost skills training across Nasarawa State.
Three bills have successfully passed their first reading in Nasarawa State, Nigeria.
The first bill, titled “A Bill For a Law to Establish the Wing Commander Abdullahi Ibrahim Vocational and Technology Institute, Lafia, and other Matters Connected Therewith,” aims to establish a vocati onal and technology institute in Lafia, the state capital. This institute will provide valuable skills training and education to the youth of the region.
The second bill, named “A Bill for A Law to Amend College of Agriculture, Science and Technology, Lafia, Nasarawa State Law 2020, and Matters Connected Thereof,” seeks to amend the existing law governing the College of Agriculture, Science and Technology in Lafia.
The proposed amendments aim to enhance the college’s operations and ensure it remains at the forefront of agricultural and technological advancements.Lastly, the third bill, titled “the Bill for a Law to Regulate the Establishment and Operation of Private Nursery, Primary, Secondary Schools and Tertiary Institutions in Nasarawa State and Other Matters Connected Therewith,” focuses on regulating the establishment and operation of private educational institutions in the state.
This bill aims to ensure that these institutions meet certain standards of quality and provide a conducive learning environment for students.
“The Speaker of the House, Alhaji Ibrahim Abdullahi, announced that the second reading of the bill for the establishment of the Wing Commander Abdullahi Ibrahim Vocational and Technology Institute, Lafia, and other related matters will take place on October 2.
The second reading of the bill to amend the College of Agriculture, Science and Technology, Lafia, Nasarawa State Law 2020, and matters connected thereof, will be scheduled for October 3.
These bills demonstrate the commitment of the Nasarawa State House of Assembly to improving the educational sector and providing opportunities for skills development in the state.
“I will slate Oct. 3, for the second reading of A Bill for A Law to Amend College of Agriculture, Science and Technology, Lafia, Nasarawa State Law 2020, and Matters Connected Thereof.
“I will also slate Oct. 4 for the second reading of A Bill for a Law to Regulate the Establishment and Operation of Private Nursery, Primary, Secondary Schools and Tertiary Institutions in Nasarawa State and Other Matters Connected Therewith,” he said.
Earlier, Alhaji Mohammed Omadefu, the Majority Leader of the House, moved motions for the bills to scale first readings.
The Minority Leader of the House, Mr Luka Zhekaba, seconded the motion.
The House unanimously passed the bills into first readings.
The Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf has said the current inflationary pressures might ease by December this year.
Yusuf disclosed this on Sunday in his Half Year Review of 2023.
His review comes amid the effect of fuel subsidy removal and foreign exchange reforms by President Bola Ahmed Tinubu’s administration.
Consequently, the prices of goods and services sharply increased.
The National Bureau of Statistics said Nigeria’s inflation is 22.41 per cent. Nigerians have continued to lament the hike in the prices of goods and services.
Meanwhile, Yusuf said that the effect of fuel subsidy removal and forex reforms would be in the short term.
According to him, the challenges would gradually reduce before the year ends.
Meanwhile, Yusuf said the CBN should implement a sustainable intervention framework to moderate the volatility in the forex market.
“Inflationary pressure is expected to ease before the end of the year.
“It would pave the way for an equilibrium exchange rate which would be more tolerable and sustainable”, he stated.
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