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Kwacha slips as dollar strengthens, as copper loses 0.3% after hitting $11,771 per ton

Bumba Mulenga — Tue, 09 Dec 2025 13:54:43 +0000

The Zambian Kwacha opened the week weaker against the US dollar, slipping 0.58 percent to close just above 23.2000 per dollar, maintaining a break above its 100-day simple moving average of 23.1891, according to Bloomberg data.

Analysts said the Kwacha could face continued pressure as corporate demand for hard currency rises ahead of the industrial close.

Meanwhile, the US dollar gained modestly against major currencies amid choppy trading ahead of a busy week of central bank meetings.

Markets are pricing in a “hawkish cut,” with the Federal Reserve expected to signal a slower pace of easing in 2026.

Despite softer US labour data, growth and inflation above the 2 percent target continue to support the dollar’s strength.

In commodity markets, copper pulled back 0.3 percent after hitting a record $11,771 per ton, as traders awaited signals from the Fed on the US economic outlook and the pace of rate cuts.

Despite the retreat, copper remains up more than 30 percent this year, driven by electrification demand, US stockpiling ahead of import tariffs, and global supply constraints.

The Access Bank Group daily market commentary noted:

“Copper’s gains reflect a combination of robust industrial demand and strategic stockpiling ahead of tariffs, while broader base metals show steady momentum. Markets are closely monitoring the Fed, with traders adjusting expectations for slower easing in 2026.”

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Kwacha extends losses against dollar for second session driven by demand-side pressures

Bumba Mulenga — Fri, 05 Dec 2025 12:42:12 +0000

The Zambian Kwacha remained under pressure against the US dollar on Thursday, extending losses for a second consecutive session as demand for hard currency continued to outweigh supply on the local market.

Bloomberg data showed that the Kwacha depreciated by 0.16 percent, closing just below the 100-day Simple Moving Average (SMA) of 23.1863.

Market analysts attributed the currency’s slide to persistent demand–supply imbalances in the foreign exchange market.

“With the festive season approaching, demand for hard currency—particularly to support increased import activity—is expected to keep the local unit slightly pressured in the near term,” it stated.

Meanwhile, Access Bank Group’s market commentary indicates that the US dollar weakened against major G-10 currencies, with the DXY Index edging lower as investors awaited key economic releases from the United States.

These include personal income and spending figures, the core Personal Consumption Expenditure (PCE) index, the broader PCE price index, and preliminary Michigan consumer sentiment data.

The reports are anticipated to give further clarity on the Federal Reserve’s policy outlook following this week’s mixed US employment data.

Analysts note a growing bearish sentiment around the dollar, influenced by year-end hedging and repatriation flows, speculation over the possible appointment of a more dovish Fed chair, and rising concerns about risks in the US labour market.

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Kwacha slips as copper hits record highs amid supply concerns

Bumba Mulenga — Mon, 01 Dec 2025 17:56:04 +0000

The Zambian kwacha closed Friday slightly weaker, extending Thursday’s bearish trend.

Bloomberg data showed the local currency fell by 0.41 percent, ending the week at just above 23.0735 per United States (US) dollar.

Analysts suggested that positive developments, including Friday’s credit ratings upgrade, could shift momentum back in favour of the Kwacha in the coming sessions, particularly as month-end flows settle.

Meanwhile, in the base metals market, copper surged to a record high on the London Metal Exchange (LME), climbing above US$11,290 a ton amid growing fears of a global supply crunch.

U.S Comex futures mirrored the rally, reflecting mounting concerns over tightening supply.

An analysis by the Access Bank Group attributed the price spike to unplanned mine disruptions, tougher smelter–miner negotiations, and sharply rising premiums highlighted at last week’s major copper conference in Shanghai.

Traders, including Mercuria, warned of significant copper deficits in 2026.

“Demand is being further strained by a rush to ship copper to the U.S. ahead of potential import tariffs, widening the gap between U.S. and LME prices, and potentially diverting more than 500,000 tons of supply into the U.S. early next year,” the report noted.

Copper had already risen nearly 30 percent this year, driven by its critical role in global electrification. Other base metals, including tin and aluminum, also advanced alongside the recent price surge.

In the foreign exchange markets, the U.S. dollar began December under pressure, as investors priced in a potential Federal Reserve rate cut and the likelihood of a dovish successor to Jerome Powell.

Market watchers would be closely monitoring the Kwacha and copper markets in the coming weeks, as global supply concerns and local economic developments continue to influence trading patterns.

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Kwacha opens week on strong footing as copper market shows signs of breakout

Bumba Mulenga — Wed, 26 Nov 2025 13:32:38 +0000

The Zambian kwacha began the week with notable strength, appreciating by about 0.60 percent against the United States (US) dollar, supported by improving sentiment in global copper markets and renewed weakness in the greenback.

Market analysts say the currency’s outlook was increasingly constructive as multiple forces converge to push copper prices toward a potential breakout above recent highs.

According to the Access Bank group market commentary, “The kwacha’s positive momentum is being underpinned by tightening global copper supply, renewed investor interest in the metal, and a softer US dollar as markets position for possible Federal Reserve rate easing. These dynamics continue to offer the local currency some breathing room despite ongoing seasonal import pressures.”

Copper, Zambia’s top export and key source of foreign exchange, was currently benefitting from a combination of supply constraints and shifting macroeconomic conditions.

Ore shortages continued to affect processors worldwide, while refined copper markets have tightened further, reflected in widening London Metal Exchange (LME) spreads.

At the same time, US warehouse stockpiles had climbed to record highs for nine straight months, diverting material away from the LME. Analysts say the buildup may reflect traders hedging against potential tariff changes under a future Trump administration, particularly on refined metal imports.

On the macro front, expectations of a Federal Reserve rate cut in December, along with signals of further easing in 2026, have weakened the US dollar and boosted risk appetite — a combination that generally favours copper prices.

Corporate interest in the sector also remains strong, with high-profile takeover bids pointing to sustained demand for copper assets, especially as global energy transition requirements accelerate.

For Zambia, these copper-positive developments provide critical support at a time when the country is navigating seasonal import demand. Higher copper prices translate into improved hard currency inflows, offering a buffer for the kwacha.

While analysts caution that volatility was likely to persist in the near term, a sustained break above copper’s recent record levels could strengthen the kwacha further.

As Access Bank notes, “If copper maintains its upward trajectory, the kwacha could see additional gains, although short-term fluctuations should be expected as the market balances external and seasonal pressures.”

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Kwacha extends losses as dollar demand remains firm at start of week, November 12

Bumba Mulenga — Tue, 18 Nov 2025 10:00:32 +0000

The Zambian kwacha weakened further at the start of the week, extending losses for a second consecutive session against the United States dollar.

Bloomberg data show the local unit depreciated by 0.82 percent, closing slightly above the K28.000 per dollar mark.

The continued pressure was attributed to elevated demand for foreign currency amid tight liquidity conditions and subdued FX inflows.

In its daily market watch, Access Bank Group however noted that liquidity is expected to improve as the week progresses due to anticipated corporate and commercial conversions ahead of end-of-month local payment obligations.

Meanwhile, in the base metals market, Access Bank reported that aluminum and copper prices slipped as traders awaited delayed US economic data and reassessed the likelihood of a December interest rate cut by the Federal Reserve.

The renewed uncertainty dampened risk appetite across industrial metals.

Aluminum, which earlier in November hit a three-year high on the back of strong Chinese demand and tightening global supply, has seen sentiment soften amid growing concerns over the US economic outlook and cautious messaging from Fed officials.

The broader decline in London Metal Exchange (LME) prices also masks regional variations, including Rio Tinto’s decision to impose surcharges on aluminum shipped to the US as domestic inventories shrink following steep import tariffs.

By late morning in Shanghai, LME aluminum was down 0.8 percent, copper slipped 0.3 percent, and zinc fell 0.5 percent, while iron ore futures also recorded modest losses.

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Zambian Kwacha strengthens for seventh consecutive session on strong foreign exchange inflows

Bumba Mulenga — Mon, 12 May 2025 14:34:26 +0000

The Zambian Kwacha extended its bullish momentum for a seventh consecutive session on Friday, buoyed by sustained foreign currency inflows amid a softening U.S. dollar, which saw the dollar index retreat from weekly highs.

The local unit appreciated by 0.61 percent against the U.S. dollar, closing just below the K26.600 mark, marking its third straight weekly gain—the strongest performance so far this year.

According to market analysts at Access Bank, the Kwacha’s recent rally has been driven by an improved supply of foreign exchange, although a slight depreciation is anticipated in the coming week as demand for hard currency resurfaces.

“Dollar buyers largely stayed out of the market last week, anticipating more favourable exchange rates. This week, demand is expected to return and may put pressure on the kwacha,” the bank noted in its daily commentary.

Absa Bank Zambia, in its own market update, confirmed the local unit’s continued strength, stating that market direction remains highly sensitive to fluctuations in foreign exchange supply and import-related demand.

“The kwacha opened Friday’s trading at K26.4000/26.5500 and strengthened steadily, closing at K26.2750/26.3250. We expect the pair to trade within a relatively stable range in the near term,” Absa said.

Globally, the dollar index edged lower on Friday, reversing some of its weekly gains as optimism faded over a potential U.S.-UK trade agreement. Market sentiment also remained cautious ahead of renewed U.S.-China trade talks.

U.S. President Donald Trump floated the idea of an 80 percent tariff on Chinese goods, calling on Beijing to open up its markets. However, White House Press Secretary Karoline Leavitt clarified that the U.S. would not reduce tariffs unilaterally.

In response, China’s central bank announced measures to enhance financial support for domestic consumption and foreign trade, signalling renewed efforts to buffer the economy from the impact of the ongoing trade war.

Meanwhile, U.S. Federal Reserve officials maintained a cautious tone following Wednesday’s policy meeting, citing lingering economic uncertainties that continue to weigh on the outlook for interest rates.

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Kwacha strengthens further against dollar as foreign exchange inflows remain steady

Bumba Mulenga — Wed, 07 May 2025 14:30:23 +0000

The Zambian kwacha continued its upward trajectory against the US dollar in Tuesday’s trading session, buoyed by consistent foreign exchange inflows that effectively balanced market demand.

Recent gains in the local currency have been largely attributed to central bank interventions and sustained foreign currency sales from offshore corporates, which have helped maintain market liquidity and ease demand pressures.

According to a market update from Absa Bank Zambia, interbank trading opened at K27.450/27.500 per dollar.

However, persistent dollar selling throughout the session pushed the pair lower, with the kwacha closing at K27.000/27.050.

“In the short term, the currency is expected to consolidate within a stable range, with direction largely influenced by ongoing supply and demand dynamics,” Absa stated.

Access Bank Group also reported that the kwacha extended its rally for a fourth straight session, breaking below the 200-day simple moving average (SMA) of K27.4174 and closing just above K27.200 per dollar—a nearly 2.0 percent gain.

“The kwacha’s strength over the past few days has been driven by central bank support and continued inflows from offshore corporates, which have sustained market liquidity and alleviated demand-side pressure,” Access Bank said.

Meanwhile, on the commodities front, metals prices in London held steady on Wednesday as investors awaited high-level trade talks between US and Chinese officials in Switzerland this weekend.

The discussions aim to ease ongoing tensions between the world’s two largest economies.

At the close of trading, benchmark copper on the London Metal Exchange dipped slightly by 0.1 percent to US$9,533.50 per metric ton, with traders cautious ahead of the anticipated diplomatic engagement.

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Kwacha reportedly showing signs of stability as Zambia nears debt restructuring milestone

Bumba Mulenga — Thu, 01 May 2025 11:42:17 +0000

Reports say the Zambian kwacha has shown signs of stabilising in recent weeks as the country moves closer to concluding its long-awaited debt restructuring programme.

On Tuesday, the local currency strengthened against the US dollar, supported by month-end foreign exchange inflows.

It opened trading on the interbank market at K27.9000/27.9500 per dollar.

However, uncertainty remains over a dispute involving two African multilateral lenders—the Eastern and Southern African Trade and Development Bank (TDB) and Afreximbank—which could delay Zambia’s exit from default.

Despite this, it is widely expected that the debt restructuring will be finalised by the third quarter of 2025.

A market analysis by Access Bank noted that while recent currency gains were encouraging, tight liquidity conditions continue to weigh on the kwacha.

Further economic pressure has come from prolonged drought, which has slashed hydropower generation—Zambia’s primary energy source—disrupting the mining sector.

With mining accounting for more than 70 percent of the country’s foreign exchange earnings, reduced production has weakened dollar inflows, intensifying pressure on the kwacha.

“Last week’s trade balance data illustrated this impact,” Access Bank analysts observed. “March recorded a trade surplus of just K0.6 billion, a sharp drop from the K10.0 billion surpluses recorded in 2021.”

Despite these setbacks, analysts remain cautiously optimistic. Commodity exports are expected to recover once drought conditions ease, and shifting global trade dynamics could play in Zambia’s favour.

Although the US is not a major buyer of Zambian copper, trade policies like tariffs introduced under former President Donald Trump could push global copper prices higher, benefiting exporters like Zambia.

With global demand for copper projected to rise as economies transition from fossil fuels, the International Energy Agency forecasts a 30 percent supply shortfall by 2035.

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Kwacha faces pressure as financial markets reopen after closing last week on a strong note

Bumba Mulenga — Tue, 29 Apr 2025 09:25:02 +0000

Zambian financial markets reopened on Tuesday, April 29, 2025, after closing on Monday for the Kenneth Kaunda Day public holiday, with the kwacha expected to face fresh pressure amid rising demand for hard currency.

The local currency had closed last week on a strong note, gaining 0.38 percent on Friday to settle around K28.0000 per US dollar.

This followed a 1.46 percent rise on Thursday, buoyed by central bank intervention, marking the kwacha’s first weekly advance in three weeks.

However, analysts warn that the gains may prove short-lived. According to Absa Bank’s daily market commentary, the kwacha’s performance on Friday was supported by sufficient dollar supply from market participants, which met the day’s relatively strong demand.

“The local unit’s interbank was quoted at K28.0000/28.0500 before firming to close 10 ngwee stronger at K27.9000/27.9500 per dollar. The next direction of the currency pair will be driven by the forces of supply and demand,” the commentary noted.

Meanwhile, the South African rand, after weakening late last week, firmed on Monday during thin holiday trade, benefiting from a softer US dollar.

The USD-ZAR pair dipped below 18.6000 and briefly tested 18.5000.

Analysts say political stability in South Africa, particularly within the Government of National Unity (GNU) and upcoming budget discussions, have raised hopes for a fiscally disciplined budget that could support long-overdue reforms.

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African currencies to remain under pressure as dollar index falls to April 2020 lows amid tariff uncertainty, recession fears

Bumba Mulenga — Wed, 16 Apr 2025 06:23:01 +0000

The United States (U.S) dollar has come under significant pressure, with the trade-weighted dollar index falling to levels last seen in April 2022 after five consecutive days of declines.

The slide was driven by renewed investor scepticism, largely due to inconsistent tariff policies under the administration of former President Donald Trump.

A temporary exemption for certain consumer electronics offered only brief relief, as Trump’s subsequent warnings of reinstated tariffs reignited market uncertainty.

According to a market analysis by Access Bank Group, this volatility has led financial markets to question the dollar’s traditional safe-haven status. Options markets, in particular, reflect growing demand for hedges against further depreciation.

“We expect continued dollar weakness, especially against the yen and euro, amid concerns over a potential US recession that could prompt a more aggressive response from the Federal Reserve,” the analysts noted.

However, the dollar’s decline has offered only limited support for African currencies. Weakening commodity markets continue to weigh on many African economies, putting downward pressure on their exchange rates.

“Tight global liquidity conditions also challenge higher-risk assets, limiting the ability of African foreign exchange markets to benefit from the dollar’s retreat. Until the Federal Reserve and other major central banks implement more aggressive monetary easing, African currencies are likely to remain under pressure, with limited short-term appreciation potential,” the report stated.

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