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The Zambian Kwacha continued its losing streak against the United States (US) dollar, drifting further away from the K19 per dollar mark as demand for foreign currency remained elevated amid constrained supply on the local market.
According to Bloomberg data, the Kwacha weakened by 0.21 percent, marking its fourth consecutive session of depreciation as pressure from import demand, particularly in the energy sector, continued to weigh on the local unit.
Market analysts indicated that the Kwacha might remain under pressure heading into the close of the week due to sustained demand for dollars from fuel importers and limited foreign currency inflows.
The local currency’s performance comes against a backdrop of heightened volatility on global foreign exchange markets, where the US dollar gained modest ground during Asian trading.
Read more: Kwacha slips as global tensions boost dollar demand
According to the Access Bank group market commentary, the dollar strengthened as oil prices climbed following renewed tensions between the United States and Iran in the Strait of Hormuz, raising concerns over global energy supply disruptions.
Investors also positioned cautiously ahead of the closely watched US nonfarm payrolls report, which is expected to indicate slower job growth in the world’s largest economy.
The Bloomberg Dollar Spot Index recorded slight gains, while yields on US two-year Treasury notes remained steady, reflecting cautious investor sentiment amid global uncertainty.
However, analysts noted that market sentiment remained balanced by expectations that any progress towards a ceasefire in the Middle East could ease oil prices and weaken the dollar.
Attention now remains fixed on upcoming US labour market data, which investors say would provide clearer direction on the health of the American economy and the future path of US monetary policy.
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