The Naira lost value at the official exchange rate on Tuesday, after going up for four days in a row. This happened even though the United States dollar became weaker.
On the other hand, the Naira stayed the same at the unofficial market, closing at N1,635 on Tuesday, the same as Monday.
The Naira went down at the official Nigerian Autonomous Foreign Exchange on Tuesday, closing at N1,602.43. This means it lost N68.24, or 4.45 per cent, from its closing value of N1,534.19 on Monday.
The dollar became stronger against a group of currencies on Tuesday because data showed that U.S. growth in the services sector slowed down. Investors had a lot to look forward to this week, such as a decision by the European Central Bank on interest rates, a speech by Federal Reserve Chair Jerome Powell to Congress, and U.S. employment data.
The Institute for Supply Management reports that February saw a slight slowdown in the growth of the services industry because of a drop in employment. Also, data showed that new orders for U.S. manufactured goods fell in January more than expected.
The dollar index went down 0.04% to 103.08 index points, when compared to the value of the dollar to six major currencies including the Euro, British pound, krona, Canadian dollar, Swiss France Japanese Yen.
The dollar index has gone up by about 2.3% this year because of good U.S. economic data, but investors’ hope for clarity on Fed policy has made the currency’s rise stop for a while.
In his speech to Congress on Wednesday and Thursday about inflation and the economy, Chair Powell is expected to repeat the Fed’s position that it wants to wait for more information before cutting rates.
At the same time, the European Central Bank meets on Thursday to talk about policy. It is generally expected that interest rates will stay at a record 4 percent. Investors will pay close attention to updated economic forecasts and look for any hints on when rates might start to go down.
Business activity in the eurozone seemed to be getting better last month, according to survey data released on Tuesday. At $1.08515, the euro was down 0.04% versus the dollar. The employment report for February could surprise markets on Friday. A higher-than-expected number could make the dollar go up more this year, even though economists think that hiring slowed down last month.
