Bias: bearish-to-range-bound, current below its 90-day average and in the lower half of the last three months' range.
Key drivers:
• Rate gap: Markets expect the US Fed to ease toward a neutral stance this year, while the CBN keeps a stability-first approach, keeping pressure on the naira modest.
• Risk/commodities: Oil sits above its longer-run average with elevated swings, which can support the naira when prices hold but volatility can trigger bigger moves and affect import costs.
• Macro factor: Nigeria’s growth is seen improving toward the mid-4% area and inflation easing toward the low-teens, lending some currency stability even as policy discipline remains central.
Range: Expect the pair to drift within the three-month range, with tests toward the lower end if USD demand remains firm and risk appetite shifts.
What could change it:
Upside risk: US data strength or a hawkish Fed tone that preserves dollar demand.
Downside risk: US data softens and the Fed accelerates easing, weighing on the dollar.
