Dollar Regains Strength and Pushes Naira Towards N600 at The Parallel Market
- The Naira is buckling under the ever increasing strength of the dollar as it is trading close to N600 per dollar as of Tuesday, May 3, 2022
- The dollar has subdued most international currencies including the euro as the US Federal Reserve prepare to announce a rate increase
- Also, it has subdued other digital currencies like the bitcoin, ethereum and other altcoins leaving bitcoin trading at $38,000
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The dollar is roaring at the international market pushing many global currencies including the British pound.
Analysts have predicted that a stronger dollar may mean unpalatable news for the naira due to the US Federal Reserves’ aggressive stance and rebounding of the dollar.
Source: Getty Images
Major US announcement to further affect major international currencies
All eyes will be on the US Federal Reserve this week as Jerome Powell, the Feds Chairman may announce a rate increase including new details on the $9 trillion balance sheet details and the unwinding plan.
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The dollar climbed to a 20 year high on Monday, May 2, 2022, as the euro laboured at about $1.o5 mark. The dollar is currently trading at $103, which is 10 per cent increase in the last 6 months.
As a result of interwoven nature of the US dollar in the world economy, its gains always put pressure on businesses and governments as they always peg their interest rates based on the dollar debt.
Naira bows to the strength of the dollar
On Tuesday, May 3, 2022, the exchange rate at the parallel market was trading at N591.2 per dollar which is down from closing at N565 per dollar as of December 31, 2021, shedding N26 year to date.
However, the dollar also subdued major cryptocurrencies which left most of them trading below their expected values as of the time of writing.
Cryptocurrencies buckle also
Bitcoin traded at $38,000 on Tuesday, May 3, 2022, while ether trades at $13.59.
The cryptos have been on the decline since the dollar rebounded towards the middle of April.
Most of the crypto assets traded lower on Monday with Bitcoin and Ether showing marginal fluctuations. Bitcoin is down by nearly half a per cent and Ether is up by roughly 0.40 per cent. AVAX has led the surge in the altcoin by space and is up by roughly 4.5 per cent. Crypto markets witnessed a downward push over the weekend and but many assets have covered their losses," Lu said regarding market trends on Monday
Over 158,000 Crypto investors have all their funds wiped out as bitcoin buckles
Recall that Legit.ng has reported about 158,832 traders have their investment liquidated, which totaled about $387.96 million. It is the biggest single liquidation on Okx, a BTC-USD-220930 transaction at $2.93.
The premier crypto, bitcoin and Ethereum have their prices have broken their key $4ok and 3k support levels individually as investors' sentiments are at a bearish level.
The important driver of the round of liquidations, promoters say, was a very sharp selloff in the week before which was driven by a strong dollar that has gotten to the new highs in two decades.
Source: Legit.ng
