The Nigerian currency broke a key resistance path against the British pound sterling this week, as the local currency maintained its bullish run against the British pound since last month
The British pound sterling/Naira pair exchange rate in the interbank and official markets settled at about N1,885–N1,890/£/£ during the week’s last trading session. Foreign exchange rates have varied slightly this week, often falling between N1,877 and N1,896/£.
Rates in the parallel (unofficial) market were slightly higher due to premiums but stabilized below the N1950/£ mark.
The local currency made an amazing comeback in 2025, defying earlier depreciation trends, thanks to CBN’s market-oriented reforms. Improved reserves and inflows provide a safety net despite being vulnerable to changes in oil prices. long-term structural changes, the non-oil diversification is essential for long-term stability.
Nigeria and the UK continue to have a strong and expanding trade relationship, supported by post-Brexit agreements, the Commonwealth partnership, and historical ties.
According to the most recent data available, which spans the 12 months ending in Q2 2025, i.e., and total bilateral trade in goods and services between July 2024 and June 2025 was £8 billion, up 11.1 per cent (£793 million) from the same period the previous year.
Naira holds below N1,450/$ mark at the official market
The official Nigerian Foreign Exchange Market saw the Nigerian Naira settle at roughly N1,435–1,438/$. Mid-market rates were around N1,436 on November 7, when the rate closed at N1,435.03 (down 0.22 per cent from the previous session). Rates for buying and selling are somewhat higher in the parallel (black) market, at N1,440 – N1,450/$. Current
Performance Year-to-date (2025): The Naira has gained a lot of value, and the USD/NGN ratio has decreased by about 7–14% overall. Low: N1,425–N1,444; High: N1,607–N1,624 (May 2025).
The British pound slumps against the American dollar
The British pound sterling fell to the 1.30 support line against the US dollar. earlier in the week, before rising to 1.31 at the last trading session of the week
The US dollar rose to its highest level in five months against its six major currency rivals as safe-haven flows made a spectacular comeback and served as a significant headwind to the risk-sensitive Pound Sterling. Following the record rally in global stocks driven by artificial intelligence (AI), traders witnessed a wave of exhaustion, and the “sell everything” theme swept the market. Investors sold gold to offset their losses in the equity markets as US tech stocks plummeted, dragging the major indices.
The long-overdue correction in global indices was fueled by investors’ growing concern over inflated technology stock valuations, especially in the artificial intelligence (AI) sector.
However, lower expectations that the US Federal Reserve (Fed) will cut interest rates once more in December also provided new support for the USD. Strong US private sector employment and services activity data caused the December Fed rate cut bets to plummet.
The Bank of England drew a line beneath the repricing that has caused sterling to decline in recent weeks by keeping interest rates at 4% while making it clear that a rate cut will occur in December.
Forward curves and short-dated gilt yields reflect the market’s current belief that a December rate cut is inevitable. For the past month, that conviction has been the biggest hindrance to the pound.
According to ADP data, US private payrolls grew by 42,000 jobs in October, surpassing forecasts of a 25,000 gain. Meanwhile, the ISM Services PMI rose more than anticipated to 52.4 last month because of a strong increase in New Orders. Before making a respectable comeback later in the week, this broad USD strength destroyed the GBP/USD pair, challenging the 1.3000 psychological level. The USD’s general decline and US Treasury bond yields, which followed Thursday’s private labor data and rekindled worries about a protracted government shutdown, were the primary drivers of Cable’s turnaround.
Week ahead: High-impact UK data
- The US data drought is expected to persist as the government shutdown shows no signs of ending. The longest shutdown in American history will return attention to some data from the private sector and remarks made by Fed officials.
- The postponed US Nonfarm Payrolls and Jobless Claims will be eagerly anticipated if government funding is reinstated.
- Additionally, the US Producer Price Index (PPI), Consumer Price Index (CPI), and Retail Sales reports for October will be highlighted. The employment data from Tuesday’s UK economic calendar will provide some incentives for traders in pounds sterling.
