The Nigerian currency posted modest gains against the British pound, rising to N1,836/£ in the official market as the pound declined against the US dollar in the global foreign exchange market.
The Nigerian naira shifted from a sharp upward trend (depreciation) into a broad sideways range, with the current exchange rate at N1,836.5/£
Technical indicators suggest that a “willing buyer, willing seller” market dynamic has replaced Nigeria’s earlier “panic buying” phase of foreign exchange.
Daily fluctuations have been contracted, as shown by metrics like the Average True Range (ATR). The typical daily changes of N50–100/£ seen in 2024–2025 are no longer prevalent in Nigerian foreign exchange market.
The GBP/NGN pair may remain range-bound if the Bank of England maintains high rates while the Central Bank of Nigeria maintains the Naira stability
However, any “dovish” move by the Bank of England (rate cuts) would likely weaken the pound relative to the Naira.
Market forecasts projected the Naira to trade between N1,800/£ and 1,850/£ this week. A decisive break above 1,850 would signal a weakened Naira, while a drop below 1,800 would suggest that the CBN’s tightening policies are effective.
Currently, Naira is in a “consolidation” phase. Despite persistent structural risks, Nigeria’s aggressive reforms of 2024–2025 are beginning to show results.
The Central Bank of Nigeria (CBN) has maintained a strict stance to control inflation under Governor Olayemi Cardoso. Aiming to bring Nigeria’s inflation into single digits (currently moderating but still high) by 2026, the country benefits from increased oil production and steady portfolio inflows, raising external reserves to about $50 billion.
Nigeria’s GDP is projected to grow by 4.3 to 4.5 percent. Meanwhile, the Bank of England remains cautious. Nigeria’s goal is to lower interest rates to boost growth, whereas the UK is expected to keep rates “higher for longer” to counteract recent inflation spikes caused by energy prices.
British Pound Sterling Turns Red against the Greenback
The British pound reversed its gains, falling to around 1.3200 and erasing much of its weekly increase.
Markets turned risk-averse, strengthening the greenback following comments from US President Trump on the Middle East conflict.
- Although it remains the world’s primary reserve currency, geopolitical tensions in the Middle East and changes in the Bank of England’s (BoE) rate policy are currently affecting its technical and fundamental outlook.
- However, fears of further damage to the Gulf region’s energy infrastructure have lessened after Iran expressed willingness for peace following Trump’s call for a truce. Nonetheless, oil prices have not dropped significantly, as energy supply disruptions will persist until infrastructure is restored.
Hopes for de-escalation in the Middle East have reduced the demand for the US dollar as a haven, but its decline is likely to be limited because rising oil prices remain a deterrent for Federal Reserve (Fed) easing. Resistance around 1.1600 remains strong, with psychological support at 1.1400.
The foreign exchange market remains volatile after the U.S president most recent speech.
- President Donald Trump stated that the war in Iran is “very close” to being finished, but also threatened to hit Iran “extremely hard” in the next two to three weeks and possibly target electric plants if a deal cannot be reached.
- “We have all the cards,” Trump said, urging other countries that rely on Middle Eastern oil to take the initiative in reopening the Strait of Hormuz. About 11 million barrels of oil are lost daily amid the blockade of the Strait of Hormuz. Iran now uses patrols, yuan fees, and secret codes to decide which ships are allowed to pass through.
