August 4, 2025
The Naira started at N1,560/$ in the black market this week
Currency traders, attributed naira fluctuations to increased currency inflow by end-users for travel, especially for the upcoming summer vacations.
Thanks to policy measures by the CBN despite a spike in recent market volatility, the Nigerian Naira has remained relatively stable over the past several months.
However the Naira settled slightly weaker on Friday when it lost 19 kobo against the dollar and was trading at N1,533.7/$ while CBN’s official website data on the Naira’s exchange rate, showed N1,533.5/$.
The Nigerian currency, traded somewhat weaker on Wednesday at N1,534.5/$, lower than Tuesday’s rate of N1,533.18/$.
Foreign direct investment is attracting more foreign participants to Nigeria’s fixed-income securities, such as treasury notes and bonds.
READ MORE; Naira Depreciates As Trump Tariffs Threaten Global Markets.
The return of foreign investments is highly welcomed, as they are essential for market stability and liquidity. Coronation reaffirmed its outlook on the market, expecting the exchange rate to stay between N1,500/$ and N1,600/$. This outlook is strongly supported by increased foreign investor participation and confidence in the central bank’s policies and reforms.
The U.S dollar shows stability after Friday’s Blood bath
The US Dollar Index (DXY), which compares the US dollar’s strength against six major currencies, is currently stagnant after roughly 1.5% losses in the last session. DXY is trading at 98.70 as of Monday during Asian hours.
The US jobs report released on the last Friday of October proved unfavorable for the US dollar and even triggered a market reaction, expecting two interest rate cuts from the Fed.
Traders now anticipate approximately 63 basis points of cuts by the end of the year, up from 34 basis points on Thursday, with the first rate cut expected in September.
Nonfarm Payrolls (NFP) from the US showed an increase of 7,300 jobs in July compared to June’s rise of 14,000 (which was revised from 14,700). This figure was below market expectations of 11000.
READ MORE; Despite CBN’s Support With $1.03bn Naira Falls By 3%, Against US Dollar .
The unemployment rate also rose to 4.2% from 4.1% in June, as expected. The surprise resignation of Fed Governor Adriana Kugler, coupled with Trump’s dismissal of a top labor official, caused weakness in the US dollar, which fell 1.5% against the Euro and 2% against the Japanese Yen.
Moreover, as with other issues, there are now additional problems with the Trump government removing Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer after a job ratings report. This action may be part of a bigger plan. If true, this would greatly affect the markets and Fed policy discussions.
