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The Zambian kwacha recovered against the United States dollar on Friday, ending a two-day losing streak and recording a modest weekly gain, although sustained demand for foreign currency continued to weigh on its monthly performance.
According to Bloomberg data, the local currency appreciated by 0.33 percent to close at around K20.34 per dollar, leaving it 0.13 percent stronger over the week.
However, the recovery did little to reverse its monthly losses, with the kwacha having depreciated by 0.43 percent against the dollar so far this month as demand for foreign currency continued to outstrip supply.
Read more: Kwacha hits one-year low as demand for dollars outpaces supply
Among African currencies tracked by Bloomberg, only Angola’s kwanza performed worse, losing 0.46 percent against the dollar over the same period.
Meanwhile, the dollar strengthened on international markets after stronger-than-expected United States employment data reinforced expectations that the Federal Reserve could raise interest rates in December.
Data released on Friday showed that the US economy added 165,000 jobs, while the unemployment rate declined to 4.1 percent.
Average wages also increased by 0.4 percent month-on-month, adding to expectations of tighter monetary policy and boosting the dollar’s appeal to investors seeking higher returns.
A stronger dollar could maintain pressure on emerging-market currencies, including the kwacha, as expectations of higher US interest rates support demand for the greenback.
Investor sentiment and developments surrounding US-Iran negotiations are also expected to influence currency movements in the coming weeks.
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