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The Zambian Kwacha appreciated significantly against the United States dollar during Wednesday’s trading session, buoyed by corporate entities offloading substantial amounts of the greenback to meet financial obligations ahead of the holiday season.
At 08:30, the USD/ZMW interbank rate opened at K27.750/27.800 on the bid-offer spread before strengthening to K27.725/27.775 by mid-day, according to Absa Bank’s daily market report.
“The bullish momentum continued, with the kwacha trading at K27.675/27.725 by close of the session, marking a net gain of 7.5 ngwee,” the report stated.
Analysts expect the Kwacha to remain firm in the near term as market dynamics continue to influence its trajectory.
Meanwhile, base metal prices dropped on Thursday following the US Federal Reserve’s signal of a slower pace of interest rate cuts next year, which strengthened the dollar.
Three-month copper on the London Metal Exchange (LME) declined by 1% to US$8,942 per metric tonne.
The dollar index hovered near a two-year peak, making greenback-priced commodities more expensive for holders of other currencies.
In the US, the Federal Reserve cut interest rates by 25 basis points on Wednesday.
Fed Chair Jerome Powell linked future cuts to progress in reducing high inflation, suggesting potential economic shifts under the Donald Trump administration.
On the Shanghai Futures Exchange, the most-traded January copper contract also fell, closing down 0.2% at US$10,127.45 per tonne.
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