The Naira is poised to weaken this week as the US Dollar rallies as investors ignore US-Venezuela tension and instead focused on a slate of US macroeconomic indicators due this week that could be crucial in steering Federal Reserve policy.
The indication of a weaker outcome for the Nigerian currency is seen as the American currency gained against a basket of currencies.
The greenback hit two-week highs against the Yen, Swiss Franc, and Canadian Dollar in the first full trading week of 2026.
The United States at the weekend, raided Venezuela and captured President Nicolas Maduro. US special operations forces seized the Venezuelan President and his wife, Cilia Flores, in a nighttime operation to bring him to the US to face a 2020 narco-terrorism indictment.
As of press time, the Dollar advanced 0.3 per cent to $1.1682 per Euro, after earlier touching its strongest level since December 10 at $1.1672.
It climbed as high as 157.295 on the Yen, 0.7951 on the Swiss Franc, and C$1.37771, all of which were the highest levels since December 22.
The American currency advanced 0.1 per cent to $1.3425 per British Pound, and added 0.3 per cent to $0.6670 versus the Aussie Dollar.
Traders currently expect two US rate cuts this year, according to calculations by LSEG based on futures.
Investors are also awaiting US President Donald Trump’s choice for the next Federal Reserve chair, as Jerome Powell’s term is set to end in May. US President Donald Trump has expressed his displeasure against Mr Powell and will be looking to replace him with a candidate that aligns with his policies.
President Trump has said he will announce his pick this month, and has said Powell’s successor will be “someone who believes in lower interest rates, by a lot.”
Meanwhile, the Naira last Friday closed the first session of 2026 positive against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) as it gained N4.91 or 0.34 per cent to trade at N1,430.85/$1 compared to the previous rate of N1,435.76/$1.
Preliminary outlook shows that the Central Bank of Nigeria (CBN) reforms may help enhance efficiency and transparency in the FX market which will narrow the premium between the NAFEM and unofficial rates, and sustain exchange rate stability. In addition, improved domestic oil refining capacity is expected to reduce foreign exchange demand for fuel imports.