The Nigerian naira closed the past week at N1,591.5 per euro, appreciating from a weekly low of N1,599/€, according to the Central Bank of Nigeria (CBN).
The local currency showed relative stability and mild gains against the euro, signaling a shift in trend. Analysts note that the naira has transitioned from a “free-fall” phase to a “descending channel,” indicating gradual strengthening as the euro’s value in naira terms declines.
Recent price action suggests the naira’s outlook against the euro has improved from neutral to marginally bullish. However, the euro recorded a slight rebound after the naira touched a quarterly high of N1,586 on April 2.
Currency models suggest that the naira remains undervalued in the long term, with prospects for gradual appreciation in the second quarter if the federal government’s ongoing fiscal reforms are sustained.
Despite the positive outlook, risks persist. Rising government expenditure, a widening fiscal deficit, and potential declines in crude oil production could exert fresh pressure on the currency, particularly in a pre-election period.
Nigeria’s growing role in global energy supply is also shaping currency dynamics. The country has emerged as an alternative supplier of aviation fuel to Europe amid disruptions in traditional Middle Eastern routes linked to US-Iran tensions. This shift was underscored by a recent shipment from the Dangote Petroleum Refinery to the United Kingdom, highlighting Europe’s increasing reliance on West African refining capacity.
Approximately 40 per cent of Europe’s jet fuel supply passes through the Strait of Hormuz, a region currently affected by heightened geopolitical tensions. Benchmark prices in northwest Europe have surged to nearly double pre-conflict levels, marking a significant shift in global supply chains.
On the investment front, the European Investment Bank (EIB) has mobilised €555 million in loans to support small and medium-sized enterprises across key Nigerian sectors, including agri-food, digital services, and healthcare.
Among major projects, the Omi-Eko electric waterways transport initiative in Lagos secured €361 million in funding under the “Team Europe” framework, involving the European Union, EIB, and France. Additional financing includes €108 million for nationwide fibre-optic expansion, €85 million for agricultural value chains—particularly dairy and cocoa—and €50 million to support healthcare manufacturing.
Euro extends decline against US dollar
The euro ended the week slightly above the $1.15 mark, remaining under pressure against the US dollar amid geopolitical uncertainties and shifting market sentiment.
Technically, the EUR/USD pair remains bearish, trading below the 20-day Simple Moving Average (SMA) at 1.1550, and beneath the 100- and 200-day SMAs clustered around the $1.168–$1.17 range.
Momentum indicators reinforce the bearish outlook. The Relative Strength Index (RSI) hovered in the mid-40s after recovering from oversold levels, while the Momentum indicator trended lower, suggesting sustained selling pressure.
The pair has traded within a narrow range for four consecutive weeks, as investors await clearer signals from ongoing geopolitical developments. Market caution intensified following a missile attack on Israel by Yemen’s Iran-backed Houthi group earlier in the week, which supported demand for the US dollar as a safe-haven asset.
Although sentiment briefly improved after remarks by US President Donald Trump suggesting a possible de-escalation timeline with Iran, the dollar regained strength later in the week following further comments at a White House press conference.
Meanwhile, the Eurozone’s recovery continues to face headwinds from external shocks, particularly energy price volatility linked to Middle East tensions. Inflation in the bloc rose to 2.5 per cent in March 2026, up from 1.7 per cent in January, reflecting renewed price pressures.
