May 11, (THEWILL) — The Nigerian naira continued its impressive rally against the United States dollar, with fresh market data showing the local currency gaining momentum amid improving foreign exchange inflows and stronger investor confidence.
In the first half of May, the naira has staged a notable recovery, pushing the exchange rate below the key psychological threshold of N1,400/$ and now testing support around the N1,350/$ region.
Market analysts believe sustained bullish momentum could see the currency strengthen further toward the N1,320/$ mark in the near term.
Currency traders say the recent appreciation has been supported by increased foreign exchange inflows from foreign investors, exporters, and oil companies.
Attractive yields in Nigeria’s fixed-income market have also encouraged offshore investors to channel funds into naira-denominated assets, boosting dollar liquidity in the official market.
The narrowing gap between official and parallel market exchange rates has further strengthened market sentiment.
While the naira traded around N1,356/$ at the official market, the parallel market rate hovered near N1,404/$, signaling gradual convergence between both segments of the forex market.
Analysts note that maintaining medium-term stability remains a key priority for the Central Bank of Nigeria (CBN), especially as global market uncertainties continue to influence currency movements.
Meanwhile, the US dollar maintained relative strength in global markets.
The US Dollar Index (DXY), which measures the greenback against six major currencies, traded around 98.1 during the London session, supported by rising geopolitical tensions in the Middle East and renewed investor demand for safe-haven assets.
Investor sentiment was also shaped by weaker-than-expected US labour data.
Nonfarm Payrolls rose by 115,000 in April, below March’s 185,000 figure but above market expectations of 62,000, while the unemployment rate remained steady at 4.3 percent.
Ongoing geopolitical tensions and global risk aversion are expected to remain key drivers of forex market volatility in the coming weeks.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
