The British Pound Sterling traded at N1,837/£1 against the naira on Thursday as strong demand for the foreign currency continued to pressure Nigeria’s foreign exchange market.
The pound exchanged within a range of N1,813/£1 and N1,862/£1 during the month, with short-term movements expected to centre around the N1,840/£1 level.
Market analysts said sustained demand for the British currency, driven by medical tourism, education expenses and other external obligations, has continued to support the pound’s strength against the naira.
London’s position as a major destination for Nigerian medical travellers, alongside payments for school fees in British institutions, remains a key factor increasing demand for sterling.
Nigeria’s elevated interest rates, maintained by the Central Bank of Nigeria (CBN) to contain inflationary pressures, have also influenced market dynamics.
Analysts noted that increased demand from buyers has pushed the pound above the N1,840/£1 support level, with further gains possible toward the previous month’s high close of N1,850/£1.
The medium- and long-term outlook for the pound remains supported by structural demand from trade activities, refined petroleum imports and external debt obligations.
Nigeria’s foreign exchange earnings remain heavily dependent on crude oil production volumes and international oil prices, with stronger external inflows expected to support foreign reserves and market liquidity.
Meanwhile, the Bank of England has maintained its benchmark interest rate at 3.75 per cent, adopting a cautious approach toward monetary easing amid concerns over rising services inflation and wage growth.
The stance has supported demand for the pound in international markets by keeping UK yields attractive compared with several other major economies.
Globally, the pound declined toward the $1.346 level during early European trading on Thursday as investors monitored developments surrounding discussions between the United States and Iran.
Market sentiment was affected by mixed signals from both countries regarding the possibility of a deal, allowing the US dollar to regain some safe-haven appeal.
US President Donald Trump said his discussions with Iran had been productive, while Vice President JD Vance warned that any potential agreement would likely involve difficult and lengthy negotiations.
Iran’s deputy foreign minister, Kazem Gharibabadi, had earlier said discussions between Tehran and Oman over reopening parts of the Strait of Hormuz had continued for three weeks, with broad agreement reached on transit routes.
However, Iranian officials later denied that active negotiations with Washington were taking place over the strategic waterway.
Investors are also watching upcoming US economic data, including initial jobless claims and July nonfarm payroll figures, for signals on the future direction of US monetary policy.
Recent data showed that private sector employment in the United States increased by 44,000 in July, below market expectations of 70,000 and lower than the previous month’s 98,000 increase, according to ADP figures.
A weaker US labour market could reduce expectations of further Federal Reserve rate increases and potentially weaken the dollar.
For the pound, investors are looking ahead to upcoming UK economic growth data, with the release of the second-quarter preliminary Gross Domestic Product figures on August 13 expected to provide fresh direction for the currency.
Market participants expect sterling trading to remain relatively stable in the near term as investors await new economic indicators.
