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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.
Read more: Kwacha extends losses as dollar demand remains firm at start of week, November 12
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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