Bias: USD/NGN is bearish-to-range-bound, since it sits below its 90-day average and inside the lower half of the three-month range.
Key drivers:
The US Fed is expected to cut rates toward a neutral stance in 2026, while the Central Bank of Nigeria sticks to stability, narrowing the USD-NGN gap and helping keep the pair contained.
Oil is at 90-day highs with higher volatility; a firmer oil backdrop improves Nigeria's export revenue and can dampen USD strength against the naira.
US payrolls and unemployment data will shape expectations for Fed easing, with softer data reinforcing downside pressure on the dollar.
Range: The pair is likely to drift within its recent range, with a test of the lower boundary possible if USD pressure wanes.
What could change it:
Upside risk: A surprisingly strong US payrolls report or a hawkish Fed shift could lift the dollar and push USD/NGN higher.
Downside risk: Softer US data and clearer Fed easing signals could soften the dollar and allow NGN to strengthen modestly.
