Naira, Kwacha Set to Rise; Cedi Faces Pressure

The Nigerian naira is expected to strengthen further against the U.S. dollar in the upcoming week, with indications of improved foreign exchange supply. This positive outlook is driven by robust oil receipts and increased flows from foreign investors drawn to high yields on Nigerian debt. The currency has shown recent appreciation, and market sentiment is bullish, with expectations of further gains if upcoming bond auctions are successful.

Similarly, Zambia's kwacha is projected to continue its upward trend, supported by improving macroeconomic conditions and resilient copper prices. Measures restricting foreign currency usage are also contributing to the kwacha's strength. In contrast, Kenya's shilling and Uganda's shilling are anticipated to hold steady, with the latter's movement dependent on an upcoming central bank interest rate decision.

Ghana's cedi, however, may experience headwinds. Persistent demand for hard currency, particularly from the energy sector, coupled with unfilled demand at central bank foreign exchange auctions, suggests a potential weakening. Traders observe a gradual decline as dollar demand consistently outpaces supply, indicating further depreciation is likely in the coming week.