The Nigerian Naira faces downward pressure against the US dollar, nearing the critical threshold of N1500/$ as the dollar index surges by 80 basis points.
As the trading week came to a close, the Nigerian Naira witnessed a notable decline against the US dollar, reaching N1495/$ in the parallel market.
This downward trend reflects heightened demand for the dollar among investors, pushing the Naira closer to the critical threshold of N1500/$. Despite an uptick in foreign exchange transactions, the Naira struggled to maintain its value amidst persistent pressure from the greenback.
The surge in the dollar index by 80 basis points further compounded the Naira's woes, driven by robust job data from the United States. This unexpected increase in job creation fueled speculation that the Federal Reserve might postpone its plans for interest rate cuts, bolstering the dollar's strength in global markets.
Consequently, the dollar index, which measures the dollar's performance against major currencies, surged by 0.8%, marking its most significant daily gain since April.
This development underscores the challenges faced by emerging market currencies like the Naira in the face of global economic dynamics and reinforces the need for effective monetary policy measures to stabilize the exchange rate and restore investor confidence.
