Naira trades at N1,600 borderline, Greenback index hits lowest degree since 2022

The Nigerian forex posted marginal features within the nation’s international change market, whereas the U.S. Greenback Index fell to its lowest degree since 2022.

Market exercise confirmed the naira buying and selling on the N1600/$ borderline within the official market, whereas fluctuating between N1620 and N1630/$ throughout numerous segments of the unofficial market.

Home demand for the greenback stays excessive, contributing to the naira’s continued weak spot, whilst international demand for the greenback has declined as a result of a sell-off within the U.S. Treasury market.

Regardless of encouraging knowledge from the Central Bank of Nigeria (CBN), rising uncertainty is clear within the sharp rise in greenback demand and tight liquidity circumstances within the nation’s foreign exchange market.

Nigeria’s entry to worldwide debt markets has grow to be more and more difficult as a result of current volatility in U.S. Treasuries—significantly because the federal authorities explores dollar-denominated devices to deal with its funds deficit.

Oil-exporting nations, significantly Nigeria, are going through new financial headwinds following the current decline in crude oil costs, which the CBN has linked to international tariffs. Crude oil exports account for about 90% of Nigeria’s international change earnings.

U.S. Greenback Index at Lowest Degree Since 2022

The U.S. Greenback Index briefly fell to its lowest level since 2022 earlier than staging a modest restoration. It hovered across the 99.60 degree as traders responded to rising stagflation considerations.

• Contemporary promoting strain on the U.S. greenback (USD) earlier within the day pushed the euro and British pound to multi-month highs. The rebound within the greenback got here regardless of these features, as considerations round inflation, client sentiment, and international commerce tensions endured—even amid a brief easing of U.S. reciprocal tariffs.
• Technically, the greenback stays underneath downward strain. The index had dropped to 99.37 earlier, marking a five-day dropping streak. The greenback continues to point out weak spot amid an escalating commerce battle with China.
• Former President Donald Trump introduced final week a 90-day moratorium on reciprocal tariffs for all buying and selling companions besides China. This transfer follows a rise in tariffs on Chinese language items from 100% to 125%, additional intensifying commerce tensions.

Trump’s tariff insurance policies have weighed on the buck, undermining U.S. monetary leverage globally and fueling political and financial instability.

Whereas few traders anticipated the greenback’s sharp drop in April, the response—although stunning—has not led to a extreme monetary shock. A lot of the international investor pullback, particularly from Japan’s inventory market, seems to be a part of a broader technique to scale back publicity to U.S. belongings.

Although the Greenback Index noticed a slight restoration yesterday, it stays technically fragile. Nonetheless, given how a lot the Nigerian naira has decoupled from international forex traits, the weak spot within the greenback index has little direct impression on the naira’s outlook.