AFRICA-FX-Most African currencies under pressure

The currencies of Ghana, Zambia and Uganda are likely to trade on the back foot this week but those of Nigeria and Kenya may hold steady.

GHANA

Ghana’s cedi could remain under pressure as the dollar strengthens and risk-averse investors pull out from emerging market assets, analysts said.

The volatile currency touched new lows last week Monday, after new details about the collapse of five banks this month.

The cedi was trading at 4.85 to the dollar by mid-morning on Thursday, compared with 4.81 a two weeks ago.

The central bank is expected to increase its interbank dollar sales but that support is unlikely to ease the pressure on the local unit, currency dealers Ralph Adubila and Joseph Amponsah said.

ZAMBIA

The kwacha is expected to remain under pressure as rising demand for the dollar continues.

At 1142 GMT on Thursday, commercial banks quoted the currency of Africa’s second-largest copper producer at 10.2000 per dollar, down from a close of 9.9800 a week ago.

“The outlook remains bearish due to the stronger greenback,” Zambia National Commercial Bank (ZANACO) said in a market note.

UGANDA

The Ugandan shilling is expected to trade with a bearish tone in the coming days, pressured by anticipated demand from firms in the manufacturing and energy sectors.

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Commercial banks quoted the shilling at 3,750/3,760, compared with last Thursday’s close of 3,765/3,775.

“We anticipate a bit of pressure from energy and manufacturing sector, some offshore appetite too remains,” said Faisal Bukenya, head of treasury at Exim Bank. The currency is 3.1 percent weaker against the dollar so far this year.

NIGERIA

The naira is expected to trade within its current range of 362 to 363 this week, as banks collate customer bids in preparation for a central bank auction of U.S. and Chinese currency on Friday, traders said.

Trading, done mostly over the telephone, has been quiet as foreign inflows dried up, with trickles coming in from exporters but not enough to quell demand, traders said.

The naira has been quoted as weak as 364 per dollar for investors last week. On the official market, supported by the central bank, it was quoted at 306.05.

“The market is on bid. Everyone wants to buy dollars,” one trader said.

KENYA

The Kenyan shilling is likely to hold steady this week, traders said.

Commercial banks quoted the shilling at 100.70/90 per dollar, compared with 100.45/65 at last Thursday’s close.

“There were fears about emerging markets in the wake of the Turkish crisis … demand side and supply side are well balanced,” said a senior trader from a commercial bank. Reuters

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