Copper Pulls Up The Kwacha

May 2008 | Market Strategy

In line with our view, the Zambian kwacha has appreciated by 9.0% since breaking through key resistance at ZMK3,675/US$ on March 12, to trade at ZMK3,350/US$ at one point on May 7. The kwacha is now testing 10-year trend-line resistance at ZMK3,350/US$ and we highlight the risk of short-term resistance posed by this line, although a medium-term break looks increasingly likely, given the high price of copper, which was trading at US$3.88/lb at one point on May 7. In the long run, continued FDI inflows and a current account surplus forecast to equal 3.8% of GDP in 2009 support further

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