Latest price action showed the Nigerian naira strengthened against the British pound amid rising interest in naira-denominated assets and weak UK economic data.
CBN latest data showed the Nigerian naira traded at about N1,806/£1 at the official market on Tuesday, February 17, 2026.
Technical patterns affirm that the psychological ‘break’ below N1,900/£ is very significant, given the Naira’s sustained resistance at that level throughout most of 2025 and 2026.
The British Pound Sterling traded less than N1,900/£1 at the Nigerian black market; between N1,850/£1 and N1,890/£1 in Nigeria’s business capital.
Why is this happening?
The British Pound is under pressure. Most recent UK data shows that inflation has fallen to 3.0%, but unemployment has increased to 5.2%. This has led the market to expect interest rate cuts at the Bank of England as early as March, weakening the British Pound.
- Nigerian equities are showing renewed optimism. Investors are responding to market reforms and improved optics in the Nigerian economy.
- The NGX All-Share index jumped 21% this year, yielding the second-best dollar returns globally. The rally beats both the 63.4 percent increase in a measure of frontier-market stocks and the 11 percent gain in the broader emerging-market index.
The stellar run increased market value by $20 billion just before a severe devaluation of the naira cut the dollar value of companies listed on the Lagos exchange in half in January 2024, bringing capitalization to approximately N121 trillion. President Bola Tinubu implemented the devaluation to attract investment and unify and liberalize Nigerian foreign exchange market
Weak UK Economic data weighs on British Pound
The British pound fell in value following the release of negative labor market data, weighed down by rising unemployment and slowing employment growth. Investors believe the Bank of England (BoE) may need to cut interest rates in the coming months to support the UK economy.
- The UK Office for National Statistics (ONS) reported an increase in the unemployment rate from 5.1% in November to 5.2% in December. This was an unexpected rise and marks the highest unemployment rate since March 2021. Additionally, employment change, the net change in the number of people employed, slowed from 82,000 to 52,000.
These figures highlight increasing economic pressures affecting the UK labor market and the economy as a whole. The ongoing weakening of the labor market is strengthening the case for the Bank of England (BoE) to cut interest rates sooner rather than later. Currency traders now focus on upcoming inflation data, scheduled later today.
Growing uncertainty in U.S Central Bank
Divergence among multiple policymakers has created uncertainty about the future direction of interest rate hikes by the Federal Reserve. Michael Barr, a governor at the Federal Reserve, stated that if inflationary risks remain stable, interest rate cuts could be imminent.
- Barr noted that future tariff pressures might impact prices, making the FOMC data dependent. He also mentioned that the employment sector has somewhat stabilized, but a significant slowdown in hiring remains the primary risk.
- Conversely, Goolsbee has adopted a more dovish stance, suggesting in an interview on CNBC that if inflation continues to decline, the Federal Reserve is likely to proceed with rate cuts aimed at reaching its target. This dovish view is supported by current data indicating inflation is on target, with more wage growth and less pressure to cut rates.
Goolsbee’s perspective aligns with recent data showing higher-than-expected non-farm payroll increases and unemployment rates below expectations. Although labor market changes are ongoing, this data favors more immediate rate cuts.
