Bias: bearish-to-range-bound, USD/NGN sits below the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: Markets expect Fed rate cuts toward neutral in 2026, while Nigeria prioritizes exchange-rate stability. The split keeps NGN perceptions stable but leaves room for sudden moves if US data defies expectations.
- Risk/commodities: Oil sits above its three-month average and remains volatile, keeping USD moves sensitive and affecting NGN via energy costs. A jump in oil or a large swing in prices can widen the FX gap.
- One macro factor: Upcoming US payrolls and unemployment readings could shift Fed expectations. A stronger payrolls print may lift the dollar, while weak data could soften it.
Range: Likely to drift within the three-month band, with a tilt toward the lower end and a tendency to test support only on clear external catalysts.
What could change it:
- Upside risk: a stronger US payrolls report or a longer-lasting high-rate signal from the Fed could lift the dollar.
- Downside risk: a faster path to rate cuts or renewed Nigerian policy stability could push USD/NGN lower as confidence improves.
