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The Nigerian naira appreciated against the major European currency on Friday, with the CBN’s latest data indicating it settled at N1557/€1, up from N1570/€1 in the past session.
The EUR/NGN exchange rate peaked near N1,774/€1 in January 2026 before dropping back to the multi-month low of around N1,555/€1
The EUR/NGN has remained pinned within a very confined setup since the beginning of July (around N1561/€1–N1576.7/€1).
Euro/Naira pair remains steady, with only small ups and downs as the Nigerian currency remains far from the previous support near N1684/€1 –N1683/€1 in the early trading weeks of Jan. The spreads from the parallel street exchanges narrow as much as from the days prior, and active central-bank-led measures to tame market disruptions.
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The CBN’s high interest rates support flows into the Nigerian economy. The CBN’s tight money supply policy aimed at stemming inflation has remained supportive of portfolio flows to Nigeria and a relatively controlled depreciation of the local currency.
European ECB rate cuts moderate Euro strength: Minimal to no change/limited to moderate changes are on tap to ECB interest rates.
Rate cuts from the European central bank and the emergence from high rates have provided some support, or some upward momentum, at the euro relative to emerging market currency markets but haven’t provided strong pressure to push EUR/NGN up significantly.
Major European currency traded near $1.14 against the US dollar
Trading narrowly behind the dollar following a slight loss from the prior trading session; currently hovering in the range of $1.138 levels in the London trading session on Friday.
Gains the pair remain possible for the short term, but the upward range is still bounded, and increased hostilities in the Middle East could make the US dollar get stronger as crude oil prices go north.
The CME FedWatch tool data showed the market now indicates a 35.8% probability of a Fed rate hike in July, together with an 82.1% likelihood of at least a quarter-point increase to the federal funds rate target in September.
Money markets show a ~35.8% chance of a Fed hike today vs an ~ 82.1% chance of at least a 25-basis points Fed hike for September.
In addition, geopolitical tension and risk continue to intensify, given that Yemen’s Iran-linked Houthis militants reportedly attacked two Saudi oil tankers in the Red Sea after these failed to abide by a blockade against their home territory.
The United States retaliated for a 13th consecutive night of military airstrikes on Iran, with US President Donald Trump stating he is close to imposing punitive military action against both Iran and the Houthis, saying that “major military punishment” awaits if attacks don’t stop.
Meanwhile, rising trade tensions as the United States intends to impose new tariffs of 10% to 12.5% on imports from its biggest trading partners in an ambitious plan to restore the Trump administration’s trade barriers following a recent Supreme Court ruling.
European imports from the United States will bear a tariff of at least 10%, structured to comply with existing trade deal agreements between the EU and the USA.
Market participants parse the European Central Bank (ECB)’s monetary policy developments. The Governing Council confirmed its intent to bring inflation back to its medium-term target of 2%; it reiterated that uncertainty remains high.
It also acknowledged that the full impact of the current energy price shock on inflation has not yet materialized.
The ECB decided to keep its key interest rates unchanged following June’s 25 basis point increase, with the rate on the deposit facility, main refinancing operations and marginal lending facility standing at 2.25%, 2.40% and 2.65% respectively.
