The naira lost value against the haven currency in the official and parallel forex markets on Tuesday, even after starting the week with a sharp rise.
CBN data showed the naira plunged to N1,533/$ on Tuesday from N1,531.95/$, the settlement price for the previous day.
The Nigerian currency lost N1.15/$ within a day.
The naira lost a key support line as it lost N5 to settle at N1565/$ on Tuesday at the black market, from N1560/$ the previous day.
However, fundamentals show the naira’s outlook is bright amid increased interest in the Nigerian capital market
This follows the trend where the naira gained value against the dollar on Monday, which also saw a rise in Nigeria’s external reserves, which stood at $39.54 billion on August 1. This surge came after the latest foreign portfolio inflow that participated in the CBN open market operations amid high returns on OMO bills.
National Bureau of Statistics data showed Nigeria’s total capital importation in the first quarter of 2025 reached $5.642 billion, highlighting increased interest in the Nigerian capital market.
Portfolio Investment was on top with an investment amount of $5.204 billion in the investments’ breakdown, while other investments came in second with $311.17 million. Lastly, foreign direct investment was the lowest with $126.29 million.
NBS data also showed the United Kingdom was Nigeria’s primary source of FX with $3.681 billion, representing 65.26 percent of the total capital imported in the first quarter, followed by South Africa with $501.29 million (8.88 percent) and Mauritius with $394.51 million (6.99 percent).
The greenback was subdued on Wednesday as market focus shifted to who President Donald Trump would elect to fill a vacancy on the Board of Governors of the Federal Reserve.
In other news, the dollar index, reflecting the greenback’s performance relative to six other currencies, was down 0.1 percent to 98.527. This was muted trade following the greenback’s dip of almost four months on the weakest jobs report in four months.
The U.S. dollar hasn’t recovered from the decline that occurred late last week following the unsatisfactory jobs report. S. Despite input costs rising at their highest rate in almost three years, services sector activity unexpectedly stagnated in July, highlighting the economic impact of Trump’s tariffs.
After two days of modest gains, the US Dollar Index (DXY), which compares the strength of the greenback against six major currencies, was steady on Wednesday at publication.
Currency traders will probably watch the speeches given by Mary Daly, Lisa Cook, and Susan Collins, among other Federal Reserve (Fed) policymakers.
Following US President Donald Trump’s announcement on Tuesday that he will name the Fed’s Chair and Kugler’s successor by the end of the week, as well as confirm his choices for Chairman, including former White House economic adviser Kevin Hassett, the greenback may strengthen as traders exercise caution.
However, growing wagers on a September interest rate cut by the US Federal Reserve (Fed) could hurt the US dollar.
However, growing wagers on a September interest rate cut by the US Federal Reserve (Fed) could hurt the US dollar.
Markets continued to reflect a 90% chance of a Fed rate cut in September with about 60 basis points of total easing anticipated by year’s end.
Ahead of US President Donald Trump’s trade deadline on Friday, when a new round of high tariffs will be imposed on several countries unless last-minute agreements are reached to negotiate lower levies, market sentiment is still cautious.
Additionally, Trump threatened to levy semi-conductors and impose tariffs of up to 250 percent on pharmaceutical imports. Since there isn’t much important economic data due on Wednesday, all eyes will be on the president’s choice to succeed Adriana Kugler, who is leaving the Fed board. Trump stated on Tuesday that he would select a candidate by the end of the week.
There hasn’t been a huge effect on the market from Trump’s outspoken criticism of the Bureau of Labor Statistics over payroll revisions, but it will be interesting to see if the Fed chair candidate chooses to follow suit. Before this week’s Bank of England policy-setting meeting, the British pound fell marginally to 1.3295, trading in a narrow range.
The UK central bank will likely lower its key interest rate a second time before the year ends, from 4.4 percent on Thursday. even though consumer price inflation nearly doubled the central bank’s 2 percent target in June,