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Kwacha headed for recovery, says Cavmont

TRYNESS TEMBO, Lusaka
THE Kwacha is expected to recover some of its losses against the United States (US) dollar in the short-term due to anticipated inflows from exporters and offshore players intending to participate in the upcoming treasury bill auction, Cavmont has observed.
Last week on Monday, the Kwacha opened trading at K9.80 and K9.85 and depreciated to close at K10.10 and K10.15 due to reduced inflows and increased demand.
“In the short-term, however, the Kwacha is expected to recoup its gains supported by expected inflows from exporters and offshore players looking to participate in Thursday’s treasury bill auction,” the bank says in its market report.
On Friday, the Kwacha closed at K10.10 and K10.15 representing a 0.98 percentage point appreciation from the day’s opening rate of K10.20 and K10.25.
Similarly, First National Bank (FNB) in its daily treasury newsletter says the Kwacha is expected to appreciate against the dollar as the greenback has begun to trickle into the market.
FNB says the local unit is expected to trade in the range of K10.15 and K10.25.
“Momentum seems skewed towards Kwacha appreciation as dollars have begun to trickle into the market,” the statement reads.
On the regional front, the South African rand traded slightly weaker against the dollar early yesterday as renewed talk of a possible rate hike by the US Federal Reserve subdued risk appetite. The rand trades at 14.4530 per dollar.
Meanwhile, the Botswana pula, Kenyan shilling, Ugandan shilling and Nigerian naira remained unchanged at 10.633, 101.25,3377 and 304 respectively.
On the commodity market, copper price on the London Metal Exchange (LME) slipped to its weakest level since late June on Monday after risk aversion roiled wider markets, and investors turn increasingly bearish on the metal given prospects for rising supply.
Three-month copper on the LME eased 0.7 percentage point to US$4,601 a tonne by 02:06 GMT, following 0.7 percentage point losses in the previous session. Earlier, the price slipped to US$4,590 a tonne, the weakest since June 24.

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