Currency News for June 8th 2020

As risk sentiments continue to improve following the gradual easing of coronavirus lockdown restrictions globally, investors are unwinding their portfolio in safe-haven assets and currencies and bracing for riskier assets. This trend was, however, unobserved as strong demand for forex at the expense of the local currency mounted pressure on the Ghanaian Cedi as it fell across the board against its three major trading partner currencies on the Bank of Ghana (BoG) inter-bank trading platform. It was, however, unchanged against the US Dollar on the Open Forex Market (oanda.com).

The Cedi extended its losing streak against its three major trading partner currencies as it failed to recover from previous week’s sluggish performance. This has come on the back of a sharp rise in demand for forex on the BoG’s forex forward auction platform against a constant supply by the BoG. Recent forex forward auctions held in early June showed that demand for Dollars came in excess of three times what the BoG offered.

On the BoG inter-bank trading platform, the Cedi weakened by 0.05%, 1.68%, and 1.48% to trade at GHC 5.6256, GHC 7.1389, and GHC 6.3547 at the start of the week from previous week’s trade values of GHC 5.6230, GHC 7.0209, and GHC 6.2619 against the Dollar, the British Pound Sterling, and the Euro respectively. The Cedi failed to recover from two consecutive weeks of decline against the Pound despite concerns that the UK is likely to exit the European Union without a trade deal, a scenario which is consistently weighing the Pound down against some of its trading pairs.

On the Open Forex Market (oanda.com), the Cedi remained unchanged at GHC 5.8010 against the Dollar but lost 2.15% and 1.50% against the Pound and the Euro to begin the week trading at GHC 7.3670 and GHC 6.5526 against previous week’s trade values of GHC 7.2117 and GHC 6.4560 respectively. The Euro built on previous week’s gains against the Cedi after the European Central Bank approved a massive stimulus package to revamp some of its economies hurt by the COVID-19 pandemic.

According to the Bank of Ghana inter-bank rates, the Ghanaian Cedi began the year 2020 at GHC 5.5370 [January 2nd, 2020] against the US Dollar and is currently selling at GHC 5.6256 [June 8th, 2020] indicating a 1.60% year-to-date depreciation. Similarly, on the Open Forex Market (oanda.com), the Ghanaian Cedi traded at GHC 5.6961 [January 2nd, 2020] and is currently trading at GHC 5.8010 [June 8th, 2020], representing a 1.84% year-to-date depreciation of the Cedi against the US Dollar.