In the first half of May, Nigeria’s FX market shows the naira strengthening against the US dollar.
At first, the recovery moved gradually, but it quickly gained strong momentum across markets.
The naira breaks below the psychological ₦1,400/$ level, which once acted as a firm barrier.
Now traders shift attention to whether it can hold gains near ₦1,350/$ support.
Analysts also expect a possible move towards ₦1,320/$ if bullish pressure continues.
Foreign exchange inflows rise as investors, exporters, and oil firms bring in more dollars.
In addition, high returns in Nigeria’s debt market attract strong offshore investment inflows.
Meanwhile, the gap between official and parallel markets continues to narrow across Nigeria.
The street rate stands around ₦1,404/$, while the official rate trades near ₦1,356/$.
Although the spread still exists, it keeps closing and signals improving market confidence.
Consequently, the Central Bank of Nigeria focuses more on stability than rapid appreciation.
The key challenge remains sustaining medium-term strength without sharp FX reversals.
Naira Strengthens On FX Inflows
Globally, the US Dollar Index trades near 98.1 and holds firm after recent volatility.
Read Also: Naira Strengthens Against US dollar, Edges Closer To ₦1,350/$ Level
At the same time, rising geopolitical tensions in the Middle East continue to support the dollar.
Moreover, US–Iran tensions over the Strait of Hormuz increase global market uncertainty.
As a result, safe-haven demand strengthens and limits gains in emerging currencies like the naira.
Global Risk Sentiment Supports Dollar
In the US, nonfarm payrolls rise by 115,000 in April, below the previous month.
However, unemployment stays at 4.3% and signals a stable labour market.
Meanwhile, gold starts the week weaker and slips below the 4,700 dollar level.
Investors rotate back into the dollar as geopolitical risks and policy expectations grow.
Still, lack of strong selling suggests gold has not fully ended its recovery phase.
Overall, the naira strengthens due to improved inflows and shifting global risk sentiment.
Finally, future direction depends on inflows, Central Bank policy, and global dollar movements.
