The USD to NGN exchange rate is currently bearish, reflecting pressures on the USD.
Key drivers include a expected interest rate cut by the Federal Reserve, which may weaken the USD as three rate reductions by mid-2026 are anticipated. Additionally, rising global economic growth and commodity prices could add volatility to USD movements. On the Nigerian side, inflation is projected to rise significantly, impacting the Naira's strength.
The near-term trading range is expected to remain stable as the USD fluctuates slightly below its 3-month average, with the Naira reflecting some resilience within a defined range.
Upside risks can arise from improved local economic conditions or oil price recovery, while downside risks could stem from unfavorable global market conditions or heightened inflation fears impacting Nigeria's economy.
