Numerous media outlets reported a resignation timetable for UK Prime Minister Sir Keir Starmer to avert an unceremonious ousting following a startling landslide victory for Labor and intra-party rival Andy Burnham in a recent by-election in Greater Manchester.
The British pound Sterling is currently trading toward its lowest point of the year against the Nigerian Naira as political instability in the United Kingdom has turned the sterling into a tailspin.
CBN’s latest data showed the Nigerian currency settled at N1,806 to the pound sterling.
Latest fundamental in the Nigerian foreign exchange market: Nigeria’s CBN is betting on Tight Money And liberalizing the Currency.
The Nigerian Apex Bank has ensured the inflow of institutional investment into Nigerian Naira-denominated bonds and other fixed-income instruments by locking up interest rates at unprecedentedly high levels
The Nigerian central bank’s stance has reduced the incentive for speculative trade in Dollars or Pounds (or even other currencies) that is done to hedge against local inflation, effectively sucking up excess liquidity that existed within Nigeria.
The CBN is well-positioned to carry out highly successful FX auction strategies for manufacturers, importers, and students who will require FX to study abroad, with enhanced reserves and liquidity, stationed at$51 billion.
British Pound Sterling trade close to this year’s lows against the US Dollar
High expectations that Keir Starmer will resign as UK prime minister caused the pound to trade close to this year’s lowest point. Early on Monday, sterling fell as much as 0.4 percent to $1.3181, close to its 2026 low of $1.3159 set in March.
The currency would be at its lowest level since November if it broke below the March low. According to people familiar with the situation, Starmer is projected to give up power in a statement, though they cautioned that this was not guaranteed.
- Andy Burnham, the mayor of Greater Manchester, was elected to Parliament last week. Over the past three days, the prime minister has been debating whether to continue opposing Burnham’s attempts to remove him from office.
- The most important question for currency traders is how Burnham’s appointment as prime minister will affect the nation’s finances. It is challenging to assess the implications for future borrowing because he has not yet provided much information about the possible policies he would pursue. Given that the UK is already having trouble with its debt levels, markets are anxious about any potential rise in bond sales to finance spending.
- There is probably more downside ahead for sterling as political risks in the UK increase, and foreign exchange traders search for currencies to shorten against a strengthening US dollar. A run toward the November low, which was just above 1.30, will be encouraged by the terrible price action for GBP/USD over the past month.
Consequently, market sentiment is fragile despite the recovery following the US-Iran deal. The Middle East accord that Washington and Tehran digitally signed was put to the test over the past two days by fighting between Israel and Hezbollah.
According to Al-Jadeed, a Hezbollah source recently said that if Israel complies with the ceasefire, they will, but if not, they have the right to retaliate. An Israeli official stated that although the ceasefire is currently being tested, they will retaliate if Hezbollah attacks.
The Federal Reserve’s hawkish stance, which was prompted by half of the FOMC members anticipating a rate hike near year’s end, sent the US dollar to a 13-month high of 101.13, with the May 16, 2025, peak at 101.26 in sight. The US Dollar Index (DXY), which measures the value of the US dollar relative to six other currencies, is currently flat but above 101 points.
