Naira Appreciates, Dollar On Defensive As Markets Hope For Best On Middle East

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Data from the Central Bank of Nigeria showed that the naira appreciated to about ₦1,361 per dollar at the Nigerian Foreign Exchange Market (NFEM) Thursday, compared to roughly ₦1,362 traded in the previous session.

The official market also witnessed stronger turnover as trading activity increased.

Currency traders attributed the naira’s stability to ongoing CBN policies aimed at boosting liquidity and reducing volatility in the foreign exchange market.

Analysts also noted that demand from importers, travelers, and businesses seeking foreign currency remained high.

The dollar remained on the defensive as hopes for a de-escalation in the Iran-U.S. war supported oil-exposed currencies.

​Iran said on Wednesday it was reviewing ‌a U.S. peace proposal that sources indicated would formally end the war but leave unresolved key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

Hopes for de-escalation had seen oil ​prices slide nearly 8% overnight, easing inflationary fears and pulling down Treasury yields as markets pared back the risk of U.S. rate hikes.

Still, Brent crude futures were last at $101.89, well above the pre-war levels.

The pullback in oil had boosted the euro, given the continent is far more reliant on imported oil than the United States, and ​it was 0.1% firmer at $1.1757, having touched a two-week top of $1.1797 overnight.

The dollar index slipped to as low as 97.902, not far from ​the two-week low it touched overnight, and well short of last week’s top of 99.092.

Australian dollar inched higher and last fetched $0.7242, just below the four-year ‌high it ⁠touched on Wednesday.

Sterling was steady at $1.3594, while the Pound has gained nearly 7% since 2024.

READ ALSO: Emirates Group Annual Profits Up 3.0% Despite Mideast War

The yen received a further lift from speculation that the Japanese authorities had intervened ​on Wednesday to buy the currency, ​sending the dollar as low ⁠as 155.00 at one stage, its strongest level in 10 weeks, according to a Reuters report.

The dollar was last trading at 156.15 on Thursday, with dealers on guard after Japan’s top currency diplomat, Atsushi Mimura, said the country was not restricted on ​intervention.

U.S. Treasury Secretary Scott Bessent will meet Japan’s Prime Minister Sanae Takaichi next week. The Nikkei reported that ​they will discuss curbing ⁠speculative yen selling, among other issues.