22 January 2013

Zambia: Kwacha Trades On Low Note Against Dollar

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American Dollar

THE Kwacha traded on the backfoot against the United States (US) dollar at the close of business last week as continued demand for the dollar from inter-bank players saw the local unit lose 25 Ngwee on the day.

According to the Zanaco Treasury Newsletter, the local unit opened trading at KR5.265/5.285 on the bid and offer, respectively, and traded around this level in the early morning session.

But with minimal support for the Kwacha on the day, the local unit slipped up to a low of KR5.290/5.310, where it eventually closed off the day.

Zanaco money market analysts said the Kwacha was expected to continue coming under pressure as demand for the greenback persists and dollar inflows remain relatively thin.

The local unit was expected to trade in the ranges of KR5.200 and KR5.300 on inter-bank.

Meanwhile, copper prices on the London Metal Excahnge (LME) rose at the close of business at the weekend and were on track to close the week with small gains, bolstered by better-than-expected fourth quarter growth in top consumer China's economy, but concerns about US debt and supply surpluses kept gains in check.

Three-month copper prices on the LME closed at US$8,061 a tonne from $8,054.

And Brent crude oil prices futures rose in choppy trading as geo-political threats to supply a possible deal temporarily lifted the US debt ceiling as well as Chinese economic data supported oil prices.

Brent crude rose 79 cents, or 0.71 per cent, to settle at $111.89 a barrel, having traded from $110.47 to $11.96.

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