The Naira began the week at N1,560/$ in the black market.
Currency traders, mainly focusing on currency exchange, noted that recent market fluctuations were linked to increased currency inflow by end-users for travel, especially for the upcoming summer vacations.
The Nigerian Naira remained relatively stable over the past several months, thanks to policy measures by the CBN despite a spike in recent market volatility
The Nigerian currency settled slightly weaker on Friday when it lost 19 kobo against the dollar and was trading at N1,533.7/$.
The CBN’s official website publishes data on the Naira’s exchange rate, showing N1,533.5/$.
On Wednesday, it traded somewhat weaker at N1,534.5/$, lower than Tuesday’s rate of N1,533.18/$. Foreign direct investment is attracting more foreign participants to Nigeria’s fixed-income securities, such as treasury notes and bonds.
The return of foreign investments is highly welcomed, as they are essential for market stability and liquidity. Coronation reaffirmed its outlook on the market, expecting the exchange rate to stay between N1,500/$ and N1,600/$. This outlook is strongly supported by increased foreign investor participation and confidence in the central bank’s policies and reforms.
The U.S dollar shows stability after Friday’s Blood bath
The US Dollar Index (DXY), which compares the US dollar’s strength against six major currencies, is currently stagnant after roughly 1.5% losses in the last session. DXY is trading at 98.70 as of Monday during Asian hours.
The US jobs report released on the last Friday of October proved unfavorable for the US dollar and even triggered a market reaction, expecting two interest rate cuts from the Fed. Traders now anticipate approximately 63 basis points of cuts by the end of the year, up from 34 basis points on Thursday, with the first rate cut expected in September.
Nonfarm Payrolls (NFP) from the US showed an increase of 7,300 jobs in July compared to June’s rise of 14,000 (which was revised from 14,700). This figure was below market expectations of 11000.
The unemployment rate also rose to 4.2% from 4.1% in June, as expected. The surprise resignation of Fed Governor Adriana Kugler, coupled with Trump’s dismissal of a top labor official, caused weakness in the US dollar, which fell 1.5% against the Euro and 2% against the Japanese Yen.
Moreover, as with other issues, there are now additional problems with the Trump government removing Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer after a job ratings report. This action may be part of a bigger plan. If true, this would greatly affect the markets and Fed policy discussions.
US President Donald Trump came to the commissioner’s defense over the weekend, saying through a Truth Social post that the commissioner of the BLS was responsible for ‘the biggest miscalculations in over 50 years,’ taking the jobs report as one of the many examples postulated.
President Donald Trump stated that he will name a new Federal Reserve governor and a new jobs data statistician in the next few days amid concerns about the direction of global growth. These appointments could influence his economic agenda.
Trump made the remarks to reporters on Sunday while returning to the White House from a weekend in Bedminster, New Jersey.
He has come under fire for his constant criticism of the Fed and his decision to fire Erika McEntarfer, the head of the Bureau of Labor Statistics, after data revealed weak job growth. These actions are perceived as undermining organizations that are generally thought to be independent of politics.
Treasury Secretary Scott Bessent, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, and National Economic Council Director Kevin Hassett have all been proposed as potential Fed chief. Trump’s choice for the vacant governorship may take over as chairman when Jerome Powell’s term ends in May.
