The Nigerian currency (naira) appreciated against the dollar by exchanging at N383 to the dollar, stronger than N385 posted at the last trading session. This was the first significant gain against the dollar since late March.
The gain was recorded at the currency spot market late Tuesday, at about 10.45 pm local time. It is, however, essential to note that the volume of trading remained low based on reduced currency trading activities by Nigerian commercial banks. The last recorded trading activity of the USD/NGN pair at the currency spot market was April 6th.
The USD/NGN remains around the resistance zone which is found between N385 and N385.50. This is pending a breakdown to lead a price action reversal, as the naira seems to be gaining momentum.
In addition, at the forwards market, the naira appreciated in the 1-year contract, surging +0.2% to close at NGN434.41/USD contract.
Interestingly, the dollar had fallen significantly against most major currencies on Tuesday, amid concerns that the dollar had surged too quickly when safe-haven demand appears to have dropped on bullish sentiments in the global stock market. Investors are starting to buy up undervalued economic assets.
The U.S. dollar index, which measures the dollar against a trade-weighted basket of six major currencies, dropped by 0.50% to close 98.90 Tuesday.11 pm Nigerian local time.