By Ben Damilola
The naira closed at N1,361 per dollar in the foreign exchange market as the United States currency remained firm against major global peers following the release of stronger-than-expected U.S. labour market data.
The local currency came under pressure as investors reacted to robust U.S. jobs figures, which reinforced expectations that the Federal Reserve could maintain a cautious approach to interest rate cuts, boosting demand for the dollar.
Market analysts said the latest employment report signalled continued resilience in the U.S. economy, prompting traders to increase holdings in dollar-denominated assets and strengthening the greenback across global markets.
The stronger dollar weighed on several emerging market currencies, including the naira, as investors adjusted their portfolios in response to changing expectations regarding U.S. monetary policy.
Currency dealers noted that despite the pressure, the naira remained relatively stable due to ongoing interventions by the Central Bank of Nigeria (CBN) and improved liquidity in the foreign exchange market.
According to market participants, inflows from foreign portfolio investors, exporters and remittances have continued to provide support for the local currency, helping to moderate volatility in the market.
The development comes amid sustained efforts by monetary authorities to stabilise the exchange rate through reforms aimed at improving transparency, boosting liquidity and enhancing investor confidence.
Analysts, however, warned that external factors, particularly movements in the U.S. dollar and global interest rate trends, remain key determinants of exchange rate performance in the near term.
They noted that stronger economic indicators from the United States could sustain demand for the dollar, potentially increasing pressure on emerging market currencies if global investors continue to favour safer assets.
Meanwhile, businesses and import-dependent sectors are closely monitoring exchange rate movements as fluctuations in the value of the naira continue to influence production costs, pricing decisions and inflationary pressures across the economy.
Market observers said the outlook for the naira would depend largely on foreign exchange inflows, oil revenue performance and the effectiveness of ongoing reforms designed to deepen the country’s foreign exchange market and attract investment.
