The Kenyan and Ugandan shillings are seen easing against the dollar in the next week, while the Tanzanian shilling and Zambian Kwacha are expected to firm, traders said.
KENYA: The shilling is expected to weaken in the days ahead, weighed down by importers, especially from the oil sector, buying a globally stronger dollar to meet end of month needs. "Towards end month we expect to see increased dollar demand by oil importers which could pressure on the shilling a bit," said a trader at one commercial bank. Technical analysis charts showed the shilling's resistance at 85.00, and traders said if it were to cross, it could weaken to touch the 85.50 level.
UGANDA: An exit of offshore investors from Uganda's debt market is seen pressuring the Ugandan shilling against the dollar over the next week, traders said. Commercial banks in Kampala quoted the currency of Africa's biggest coffee exporter at 2515/2525, weaker than last Thursday's close of 2500/2510. "Definitely the downbeat mood of foreign investors will likely keep chipping away at the shilling in the next few days," said Dickson Musoni, trader at KCB Uganda. "But depending on whether yields fall further or bottom out at these levels, as is the sense in the market, the drop should be moderate."
NIGERIA: The Nigerian naira will likely remain range bound next week against the dollar as anticipated dollar flows from oil companies' month-end sales and offshore investors buying local debt subdue pressure on the local currency.
The naira was trading at 157.90 to the dollar on the interbank market, weaker than the 157.80 it closed at last Thursday. Traders said an upsurge in dollar demand from importers continued to outweigh supplies in the market, putting the naira under pressure. Traders said the naira should trade within the 157-158 range next week supported by more dollars flow into the market from oil companies buying naira to meet their local obligations and offshore investors participating in treasury bills auction.
TANZANIA: Tanzania's shilling is seen gaining against the dollar in the next week, helped by a slowdown in demand for the dollar and an expected liquidity squeeze on the local currency. Commercial banks in Dar es Salaam quoted the shilling at 1,570/1,578 to the dollar on Thursday, marginally weaker than 1,569/1,575 a week ago. "The shilling will likely strengthen slightly against the dollar next week due to an expected liquidity squeeze. Some corporate players are also expected to sell dollars towards the end of the month," said Patrick Kapella, chief dealer at First National Bank Tanzania. "We expect the shilling to trade in the marginal range of 1,565-1,575 next week. There are small US dollar inflows coming in from tourism at the moment, but nothing much to justify any big move in the market."
ZAMBIA: The Zambian kwacha is expected to firm going into next week as rising demand for the dollar reduces. The kwacha continued to be bearish this week on the back of dollar demand from the energy sector, which outstripped supply from the mines. On Thursday, commercial banks quoted the kwacha at 5,055 from 5,015 a week ago, but commercial bank traders said the local unit was likely to appreciate.
GHANA: Ghana's cedi (GHS) could dip against the dollar next week on improved corporate greenback demand for seasonal imports unless the central bank intervenes, traders said. "Going into next week, we see the local currency staying within the current band, or further lose its recent gains," said Barclays Bank trader Jacob Brobbey. The cedi traded at 1.9175 to the dollar at 1300 GMT on Thursday, down from the previous day's close of 1.9125. Traders said the central bank, which has supported the cedi in recent past, had not been in the market in past two weeks.
Comments
Comments are closed.