The Nigerian naira held around the N1850/ resistance level against the British pound at mid-week trading session
According to data from the official NFEM window, the Naira is trading at an average of N1,844/£ against the British pound during the midweek trading session, maintaining a strong position against the Nigerian Naira.
The naira bulls are reliant on the CBN’s latest narrative to maintain the currency’s stability.
The CBN has backup plans to stabilize the naira if the Middle East crisis puts pressure on it.
The Nigerian Apex Bank was prepared to step in and stabilize the market as investors sold off riskier emerging market assets.
The local currency has moderated in the foreign exchange market since the start of the conflict; however, investors have continued to support the currency by buying high-yielding assets like Nigerian bonds and local equities.
Emerging market assets have been under pressure since investors flocked to safe-haven assets like the US dollar since the start of the US-Israel war against Iran. There will soon be the largest monthly drop in the MSCI Emerging Markets Currency Index since the end of 2024.
Market action showed the British pound/ naira pair medium-term trend is negative, indicating that the local currency is either strengthening or stabilizing relative to the British Pound sterling.
This narrative likely affirms a “Sell” bias for the pair (favoring the local currency) because the price is trading below both the short-term and long-term moving averages. The Relative Strength Index (RSI), currently around 77.55 on some daily charts, indicates that the British Sterling could be overbought soon.
The Nigerian Apex Bank lowered the Monetary Policy Rate (MPR) from 27% to 26.5% in late February 2026.
The CBN appears confident that Nigeria’s inflation rate is finally slowing, evidenced by this 50-basis-point cut (with inflation expected to reach 12.94% in 2026). In addition, foreign reserves have reached a 13-year high.
External shocks, especially the ongoing conflict in the Middle East (referred to in current markets as the Iran War), are fueling a “stagflation” scare in the UK economy.
British pound on a three-day winning streak against U.S Dollar
The British Pound Sterling (GBP) continues to outperform the US dollar (USD) for the third straight trading day.
- The GBP/USD pair trades about 0.1% higher near 1.3370 during the early European session as the US dollar faces pressure ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.
- The US Dollar Index (DXY), which compares the dollar to six major currencies, is trading cautiously near its three-day low of 99.50.
- Currency traders are optimistic that the Fed will keep interest rates in the current range of 3.50% to 3.75%, according to the CME FedWatch tool. Rising oil prices due to fears over energy supply have increased inflation expectations globally, leading traders to expect the Fed to maintain the status quo.
The Bank of England’s (BoE) interest rate decision on Thursday and the UK’s employment data for the three months ending in January will be key catalysts for the British currency this week.
- The RSI has moved from the negative zone, between 20 and 40, to the neutral zone between 40 and 60, indicating a slowdown in the downward trend but not yet a reversal to bullish momentum
The Bank of England (BoE) is expected to keep the base rate at 3.75%, as it did in February. The war has driven energy prices up again, causing the BoE to halt its rate-cutting cycle even though inflation nears the 2% target.
The British GDP growth forecast for 2026 has been reduced to a disappointing 1.0%. The sterling is being impacted by high labor costs and rising unemployment, which is expected to reach 5.5%.
