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The Naira surpassed a key resistance level against the Euro as the European currency declined to its lowest point since May 2025 against the US dollar.
According to the latest data from the Central Bank of Nigeria (CBN), the Naira closed at N1,497/€, thereby breaching the N1,500/€ resistance for the first time since April 2024.
Before that period, the exchange rate had been significantly stronger during most of 2023, remaining below N1,000/€.
However, following substantial foreign exchange (FX) market reforms and naira’s devaluation in 2024, the rate rallied above N1,500/€, reaching as high as N1,800/€.
The EUR/NGN pair has experienced notable bearish phases, declining from levels near N1,684/€ late last year to N1,497/€.
Consequently, the Nigerian Naira has remained within a relatively narrow band of N1,327/$ to N1,330 per US dollar in the official Nigerian Foreign Exchange Market (NFEM), supported by successive central bank liquidity injections and stable foreign reserves.
Recent market movements indicate a narrowing spread between official and parallel market rates, which enhances price discovery and deters arbitrage opportunities.
The US dollar has predominantly traded between N1,370/$ and N1,390/$ in the parallel market.
Fundamentally, the Naira has effectively appreciated against the Euro, as the Kenyan Naira’s value is strongly correlated to the US dollar in Nigeria’s foreign exchange market. When the Euro depreciates against the dollar in the global forex market, cross-rates adjust accordingly, making euro-denominated transactions more costly and causing the Naira to appreciate relative to the Euro, even if the dollar remains stable.
Speculative demand has been mitigated through the CBN’s foreign exchange reforms, tightening of monetary policy, and increased transparency within official currency windows, such as the Nigerian Autonomous Foreign Exchange Market (NAFEM).
A significant macroeconomic factor positively influencing the Naira is the increased utilization of Nigeria’s domestic refining capacity, notably the Dangote Refinery, which has reduced the country’s foreign exchange expenditure on importing petroleum products, thereby conserving FX reserves.
In addition, robust trade performance driven by strong agricultural exports and high crude oil prices has supported the country’s forex surplus with the Eurozone.
The Naira has maintained key moving averages on cross-currency charts, suggesting a more stable short-to-medium-term trend compared to previous years marked by heavy depreciation. Continued inflows and tighter liquidity controls are expected to sustain this trend.
Euro melts against the greenback in the global foreign exchange market
The Euro has depreciated to its weakest level since May 2025 amid rising investor concerns regarding political and fiscal instability across the Eurozone.
- The common currency dropped 0.8%, reaching $1.1161 during Asian trading sessions, with hedge funds contributing to the sell-off. News regarding preparations for an early election in Spain further heightened regional instability, influencing French bond markets.
- The premium investors demanded for French debt relative to similar German bunds rose to its highest level since 2011.
- Market sources, preferring to remain anonymous because of a lack of authorization, reported that short-term funds in Asia were offering US dollars in exchange for euros, fueling selling pressure that led to further options-related sales.
Investors are particularly concerned about the political landscape in France, where opposition parties have shown limited willingness to negotiate with President Emmanuel Macron’s outgoing government ahead of the upcoming election. A recent poll indicates that both far-right candidate Marine Le Pen and far-left contender Jean-Luc Mélenchon are projected to advance to the second-round runoff.
