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<p>Before Federal Reserve Chair Jerome Powell spoke, the safe-haven currency had some strength. But, the naira, Nigeria's money, fell a little during the first trading day of the week.</p>
<p>The naira has been losing value for ninety days after it crossed the N1,525/$ mark in the black market.</p>
<p>According to the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira dropped by about N14. It traded at N1,523/$1, compared to N1,509/$1 last Friday, July 5, 2024.</p>
<p>More importers and travelers needing dollars during summer vacations have put extra pressure on the naira.</p>
<p>Problems like instability, currency depreciation, and lack of dollars have made it hard for Nigeria's central bank to make the naira stronger, even though Nigeria's foreign exchange assets have increased.</p>
<p>The naira was the worst-performing currency in the world by the end of the first half of 2024.</p>
<p>According to S&P Global, Nigeria's foreign exchange issues and the pressure on the naira could be fixed and the economy improved with help from the Dangote Oil Refinery and Petrochemicals company.</p>
<h4><strong>U.S. Dollar Index Continues to Rise</strong></h4>
<p>Jerome Powell is expected to give more details on this trend later today. Also, other Fed officials will talk later this week.</p>
<p>The dollar index and dollar index futures went up a bit in London trade, stabilizing after a week of big losses because people think the Fed might cut interest rates.</p>
<p>The US 2-year yield, which shows Fed rate expectations, dropped below 4.70% after last week’s bad US jobs report.</p>
<p>For the yield to stay stable and go down more, Powell must talk about lowering rates.</p>
<p>The market thinks the Fed will cut rates twice this year, with a strong chance of one cut in September (almost 80% before Powell’s talk).</p>
<p>Since this month started, the US Dollar Index has been under pressure. If Powell talks about lowering rates, it could drop more, especially since the safe-haven money flows caused by problems in France are over.</p>
<p>The US dollar index has been rising since 2018, putting extra pressure on currencies like the Nigerian naira.</p>
<p>The US dollar index is still going up since the start of the year. At its current levels, the 38.2% Fibonacci retracement at 104.20 gives big support to the positive trend this year.</p>
<p>If the US dollar index goes below this level, other major currencies should get help, and the index should enter a medium-term slowing down period.</p>
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