Naira slides to N1,845/€ as Euro hits 3-year high against dollar

BY TEMITOPE ADEBAYO

The naira weakened against the euro on Easter Monday, trading at N1,845 in the parallel market as the European currency surged to its strongest level against the U.S. dollar in three years.

The euro’s sharp climb was fuelled by growing investor demand amid fresh trade tensions between the United States and China, alongside a weakening dollar that pushed the EUR/USD exchange rate past the 1.15 mark for the first time since 2022. The surge has seen the naira lose its N1, 800/€ support, widening the gap in the unofficial market where tight currency controls by Nigeria’s central bank continue to squeeze supply.

With the black market serving as a key indicator of foreign exchange liquidity, traders say the naira’s struggle to hold ground against the euro underlines persistent pressures in Nigeria’s foreign exchange ecosystem, especially with the Central Bank of Nigeria’s restrictions on dollar access for imports and personal travel allowances.

The dollar’s decline deepened as the U.S. Dollar Index fell to 98.2, its lowest since March 2022, reversing years of strength built on trade policies introduced during Donald Trump’s first term. The drop came as President Trump ordered an investigation into potential new tariffs on critical mineral imports, reigniting global trade tensions that have unsettled currency markets.

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Investors rushed into the euro as a safe haven, pushing the EUR/USD pair higher during both Asian and early European trading sessions. Analysts suggest further retaliation from China could extend the euro’s rally, with resistance expected near 1.153.

Meanwhile, political concerns in the United States added to market jitters, as reports emerged that the Trump administration was exploring the possibility of dismissing Federal Reserve Chair Jerome Powell — a move that U.S. Senator Elizabeth Warren warned could trigger a financial meltdown and destroy investor trust in U.S. capital markets.

Warren cautioned that the Fed’s independence is critical for market stability and that attempts to politicise monetary policy would strip the U.S. economy of the credibility that separates it from weaker financial systems.

The uncertainty around U.S. trade policy and monetary leadership continues to unsettle global investors, leaving emerging-market currencies like the naira increasingly vulnerable to external shocks.