If you've got school fees or a London trip to pay for, you'll want to see this – the Pound is doing a little dance against the Naira this morning.

So, here's where things stand this Friday morning – the British Pound is changing hands at N1,834 to £1 in Nigeria's FX market, according to data tracked by cbinews.tv.

It's been a bit of a wobbly ride this month, to be honest. The pair has bounced between N1,813 and N1,862, so that N1,830 mark is acting like a magnet right now – plenty of short-term volatility around there.

Why is demand for Pounds still so stubbornly high? Two big reasons: medical trips to London and those UK school fees. That demand just isn't letting up. The Central Bank of Nigeria, for its part, is keeping interest rates high to try and tame inflation at home.

Traders are watching the N1,840 level closely. As cbinews.tv notes, if buyers manage to push it above that, we could see another run towards the previous monthly high of N1,850.

All eyes will also be on month-end liquidity – you know how it goes: authorised dealers, BDCs and the big corporates all rushing to settle payments before the month closes. That always brings a bit of drama.

On the bigger picture, Nigeria's inflation is still running hotter than the UK's, which naturally puts pressure on the Naira. The CBN has been doing those regular FX sales to BDC operators to stop any sharp jumps, and thankfully, higher reserves have given them a bit more firepower to smooth things out.

What's happening to the Pound globally?

Sterling itself is actually having a softer day against the Dollar, hovering around the $1.3445 mark in early European trade on Friday.

A couple of things are propping up the Dollar – crude oil prices are climbing again, and tensions in the Middle East are flaring. Iran’s Parliament Speaker, Mohammad Bagher Ghalibaf, condemned US missile strikes on residential areas on Qeshm Island and towns in Minab and Lamerd on Thursday, with reports of strikes across Bushehr, Fars and Khuzestan. That sort of headline tends to push investors towards safe-haven dollars.

But Sterling isn't without support. The Bank of England is playing it very cautiously on rate cuts. Markets reckon there's a more than 90% chance the BoE holds rates at 3.75% for a fifth meeting in a row, with UK inflation looking less worrisome. That keeps London yields rather attractive compared to others.

Across the pond, the US story is softening. US growth slowed to 1.5% in Q2, down from 2.1%, and the headline PCE inflation index actually fell 0.1% in June – the first monthly fall since April 2020. The Fed kept its target range at 3.50%-3.75% on an 8-1 vote, even though three members wanted a hike. Sterling took that as a win and popped by about 40 pips above 1.3350 right after the announcement.

Reporting via cbinews.tv

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