GBP/NGN Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and within a stable range.
Key drivers:
• Rate gap: The Bank of England's cautious stance on further rate cuts contrasts with the Central Bank of Nigeria's focus on stabilizing the naira, influencing the exchange rate between the two currencies.
• Risk/commodities: The recent rise in oil prices supports the Nigerian economy, potentially strengthening the naira, but concerns over global trade dynamics dampen GBP's prospects.
• One macro factor: Warnings about potential US tariffs on UK goods may impact the GBP negatively, contributing to uncertainties about the UK's economic stability.
Range: Movements are expected to hold within the recent range, as both currencies face opposing pressures.
What could change it:
• Upside risk: A sudden improvement in UK economic data or a resolution of US trade tensions could bolster the GBP significantly.
• Downside risk: Prolonged pressure from new tariffs or poor economic indicators from the UK could further weaken the GBP.
