Kwacha strengthens against dollar despite third consecutive weekly loss

Meanwhile, analysts expect the US dollar to remain supported in the near term following stronger-than-expected US employment data for August, which has reinforced expectations that the US Federal Reserve could raise interest rates later this month.

The Bloomberg Dollar Spot Index was little changed at the start of the week after advancing on Friday, with resilient US jobs growth, higher energy prices and expectations of firm inflation data continuing to underpin the greenback.

Analysts noted, however, that further gains for the dollar could be capped by renewed strength in the Japanese yen and uncertainty surrounding US fiscal policy and the Treasury market.

They added that while the balance of risks currently favours modest dollar appreciation, particularly against currencies backed by less aggressive central banks, higher long-term US bond yields could trigger policy intervention or reignite concerns over the US fiscal outlook, limiting the dollar’s upward momentum.

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