The Nigerian naira fluctuated around N2,177 per British pound in the unofficial market today.
Recent price action shows the Nigerian currency has remained in a consolidation phase in the unofficial market, ranging between N2,100 and N2,180/£ throughout April amid increased buying pressure on the British sterling in the global market.
Markets project that foreign investors will play a key role in determining the stability of the Nigerian naira in 2025.
Nigeria ranks 38th among the UK’s trade partners, while the UK is Nigeria’s second-largest trading partner.
According to Central Bank of Nigeria (CBN) data, the UK accounts for 50% of remittances sent by Nigerians abroad. Remittances are expected to rise by 9% to $21 billion in 2024.
The UK remains a preferred destination for many young Nigerians due to historical ties, aligned time zones, shorter travel distances compared to the United States and Canada, and the absence of language barriers.
UBS Bullish on British Pound Sterling
UBS Group AG has revised its forecast for the GBP/USD pair, citing gains in the pound and a weakening U.S. dollar following recent U.S. government announcements on Liberation Day.
- The Swiss bank now expects the GBP/USD exchange rate to reach 1.39 by the end of March 2026, according to a note from its Chief Investment Office released Thursday.
- UBS noted that while the British pound is not yet classified as a safe-haven currency, it has gained appeal due to its liquidity and potential for carry trade strategies.
- The exclusion of the UK from former President Donald Trump’s punitive tariff lists also contributed to strengthening the pound. The UK was subjected only to a 10% universal rate instead of specific additional tariffs.
The UK’s diplomatic approach—choosing not to engage in major retaliatory measures—may pave the way for future trade agreements.
UBS also cautioned that the UK’s trade-dependent economy remains vulnerable in the event of a global recession, which could pressure the pound.
Although not formally recognized as a haven currency, the pound, like the euro, displayed haven-like behavior during the recent dollar sell-off. UBS highlighted the relative volatility of the pound versus the euro, attributing it in part to low yields on both currencies due to ongoing geopolitical tensions.
Dollar Recovers Slightly from Monday’s Decline in Global Markets
The dollar struggled to recover from significant losses on Tuesday, as uncertainty persisted over a potential de-escalation in the Sino-U.S. trade conflict. Treasury Secretary Scott Bessent indicated that the responsibility to initiate negotiations rested with China.
- Bessent emphasized that it was China’s duty to reduce tariffs, amid a series of mixed signals on the progress of trade discussions between the world’s two largest economies.
- Beijing denied these claims, while former President Trump asserted that progress had been made and confirmed communication with Chinese President Xi Jinping.
- This uncertainty led investors to continue selling the dollar, which fell sharply in the previous session against safe-haven currencies such as the yen and the Swiss franc.
Despite limited concrete evidence of a trade breakthrough, both the U.S. and China appear to have softened their stances recently. The Trump administration expressed openness to reducing tariffs, while China exempted some U.S. imports from its 125% tariff regime.
The euro fell by 0.15%, trading at $1.14, but remains on track for its largest monthly gain against the dollar in nearly 15 years as investors increasingly pivot toward European assets.
The British pound hovered near a three-year high, last trading at $1.34.
Meanwhile, the U.S. dollar index stabilized at 99.079 against a basket of major currencies, following a 0.6% decline in the previous session. Investors are bracing for a week packed with U.S. economic data, which may provide early insights into the impact of Trump-era trade policies.
The Friday jobs report will be particularly important for markets, along with preliminary Q1 GDP figures and core PCE data—considered the Federal Reserve’s preferred inflation gauge—scheduled for release earlier in the week.