Business

US, Europe Stocks Drop As Dollar Rises

Published

1 year ago

February 13, 2024

Stocks in the United States and Europe slumped on Tuesday while the dollar climbed as data showed that US inflation slowed less than expected in January, diminishing chances of an early interest rate cut.

The closely watched Consumer Price Index (CPI) rose 3.1 per cent from a year ago in January, down from 3.4 per cent in December, the Department of Labor said, while analysts had tipped the rate could fall below 3.0 per cent.

Meanwhile, the “core” CPI reading that excludes volatile food and energy prices and is more important to policymakers, was steady at a 3.9 per cent annual increase.

The US Federal Reserve has indicated it will likely begin to cut interest rates – which it began to hike in 2022 to tame surging inflation – later this year as the pace of price rises returns closer to its 2.0 percent target. That has heightened the attention of investors to US inflation data.

“The January inflation report came in hot across the board and that has the potential to spook investors after a big rally over the last few months,” said eToro analyst Bret Kenwell.

Stocks have been propelled to new heights in recent months as investors anticipate a drop in interest rates which will boost the fortunes of companies, as well as the blockbuster performance of the US tech industry thanks to the boom in artificial intelligence.

Patrick O’Hare at Briefing.com said that “the hotter-than-expected CPI may give investors an excuse to take profits in a market that many feel is overbought on a short-term basis.”

Wall Street’s main indices fell by more than one per cent, with the Dow shedding 1.1 per cent from a record high.

Europe stocks closed down almost one per cent.

Traders had been hoping that Tuesday’s CPI reading in the world’s biggest economy would give the Federal Reserve room to lower interest rates.

Last month, Fed chief Jerome Powell indicated a continuation in the trend of falling inflation was sufficient for the US central bank to begin cutting interest rates later this year, but downplayed the likelihood of a March cut that the market had been hoping for.

“Hopes for a Fed March rate cut have all but disappeared with the market now pricing in a 53 percent probability of a first cut being seen in June,” said market analyst Axel Rudolph at online trading platform IG.

In Asia, most of the region returned to work after a long weekend. Tokyo led advances thanks to a surge in shares of Japanese investment group SoftBank, which was boosted by another blockbuster day for its US-listed chip designer Arm.

Arm has almost doubled in value in the past week — and trebled since its September listing — owing to healthy demand for semiconductors fuelled by an expected boom in artificial intelligence.

Bitcoin topped $50,000 Monday for the first time since late 2021 as investors grew optimistic that US approval of broader trading in the unit will ramp up demand.

The cryptocurrency has enjoyed a strong run in recent months, fuelled by expectations US lawmakers would allow the creation of exchange-traded funds (ETFs) that track the price and let the public invest in crypto without directly purchasing it.

After initially dropping in reaction to last month’s green light by Washington, bitcoin has rallied about 25 per cent since January 22.

AFP

Business

Naira Depreciates Against Dollar

Published

1 week ago

July 4, 2025

Editor

The Naira experienced a slight depreciation on Friday at the official market, trading at N1,528.56 to the dollar.

Data obtained from the website of the Central Bank of Nigeria (CBN) showed that the Naira lost N2.73.

This represents a 0.17 percent loss compared to the N1,525.82 recorded on Thursday.

The Naira, which opened the week on Monday with a gain of N9.52 against the dollar, held steady gains until Thursday.

On Wednesday, the local currency gained N3.42 against the dollar and received commendation from the International Monetary Fund (IMF).

The IMF, in its 2025 Article IV Consultation report on Nigeria, commended the CBN for its reforms to the foreign exchange market, which supported price discovery and liquidity.

Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

3 weeks ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

2 months ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.