Africa-FX: Ghanaian and Zambian Currencies Seen Under Pressure

LSEG data showed the cedi trading at 11.03 to the dollar on Thursday, compared to 11.01 a week earlier.

“Strong FX demand from the energy, commerce and manufacturing sectors is likely ​to spur a stronger dollar in the week ahead, as supply remains tight ​despite decent interbank turnover in recent sessions,” said Andrews Akoto, head of ⁠trading at Absa Bank Ghana.

He said bids surpassed $401 million at the last central bank ​FX auction held on Tuesday, with only $110 million filled, signalling a significant backlog of FX ​demand in the market.

Kenya’s shilling should be steady as foreign-currency demand has eased since the U.S. and Iran agreed a ceasefire and global financial markets turned optimistic about the prospects for a peace deal.

On Thursday ​the shilling traded at 129.05/129.25 per dollar, compared to last Thursday’s close of 129.10/129.40.

Uganda’s shilling ​is also forecast to be relatively stable, helped by dollar inflows from coffee exporters and a slowdown ‌in ⁠FX appetite.

Commercial banks quoted the shilling at 3,695/3,705 to the U.S. currency, compared to last Thursday’s close of 3,687/3,697.

“We have a bit of flows coming in from coffee while we’ve also seen demand pressure from energy importers slowing,” a trader said.

The shilling is likely to ​trade in a range ​of 3,670-3,710 against ⁠the dollar in the coming days, he said.

Zambia’s kwacha may come under pressure against the dollar next week as the price of ​copper, the country’s main foreign exchange earner, has been unstable.

Commercial banks ​quoted the currency ⁠of Africa’s No.2 copper producer at 19.40 per dollar from 19.46 a week ago.

“The notable recovery in global copper prices has helped to cushion the local currency, but the metal is ⁠likely ​to remain volatile over the near term,” Access Bank ​said in a note.