Market News

The Nigerian currency and the Euro are being shaped by the struggle between Nigeria’s internal recovery and global geopolitical tensions.

The Naira has found a new “floor” because of structural reforms, while the Euro is currently navigating difficulties amid high energy volatility and evolving monetary policies from Nigeria’s Apex Bank.

The latest market action showed the Naira entered a consolidation phase.  The extreme volatility of 2024–2025 has been tamed, although structural vulnerabilities still exist. CBN’s latest data showed the official exchange is now at N1,582 per EUR as bulls fight to claim the N1,550/€ mark.

The Nigerian foreign exchange market has stabilized, and the difference between official and parallel rates has decreased thanks to improved reserves (which reached multi-year highs in early 2026) and CBN interventions and auctions.

The Central Bank of Nigeria (CBN) pegged the Monetary Policy Rate (MPR) at 26.5% to reduce headline inflation and attract foreign portfolio investment (FPI).

Nigeria’s Inflation unexpectedly increased to 15.38 per cent in March 2026 (from 15.06 per cent in February) following a consistent decline. This was mostly caused by growing fuel and transportation expenses associated with escalating tensions in the Middle East.

The Dangote Refinery’s full operation has also decreased the foreign exchange demand for imported fuel, acting as a cushion for the Nigerian currency. The CBN has cleared most of its FX forward backlogs, boosting confidence in the Nigerian foreign exchange market

Naira’s outlook against the European currency is slightly bullish. Expect ongoing volatility, but if Nigerian crude oil is continually much higher than the FG Benchmark and CBN’s credibility is maintained, there may be a chance for relative Naira stability (or slight strengthening). Nigerian reform setbacks or a more severe slowdown in the Eurozone could turn things around.

Euro Dips on Germany’s Growth Forecast Revision

The euro fell on Wednesday after Germany’s growth forecast was significantly revised downward, while the dollar moved slightly in response to the latest developments in the Middle East. The value of the euro was $1.17, which was 0.26 per cent less than that of the US dollar.

Pessimism emanating from the largest economy in the monetary union is hurting the European currency.  Europe’s largest economy announced on Wednesday that it was halving its growth forecasts for this year and that the country’s GDP would increase by 0.5 per cent in 2026.

The Euro is presently in a “wait-and-see” phase as the Eurozone economy reacts to disruptions in international supply chains. The European Central Bank is expected to either maintain or slightly raise rates (projected at a 25bps hike in late April) to show a firm stance against rising energy-driven inflation.

The situation for businesses and investors has worsened following the closure of the Strait of Hormuz, which caused a spike in oil and gas prices, suggesting that Germany is ready for challenging times on the energy front.

President Donald Trump declared he would continue the blockade of Iranian ports while unilaterally extending the ceasefire with Iran indefinitely. For their part, the Iranians have declared that they have seized two ships that were trying to pass through the Strait of Hormuz and are still enforcing their own blockade. Any euphoria in the event of an agreement would be limited because the euro-dollar pair is already nearing its pre-war levels.

Technically speaking, the EUR/USD is bullish for the short term because the price is consistently above its critical moving averages. The first layer of dynamic support is provided by the 20-period simple moving average (SMA) at 1.1725, while the 100- and 200-period SMAs grouped around 1.1595 sit further below and suggest an established underlying uptrend.

The Momentum indicator is still positive and moving forward, while the 14-period Relative Strength Index (RSI) indicator is hovering around 73, indicating ongoing buying pressure even as the pair stretches to a new high.