15 February 2013

Zambia: Kwacha Drops Against Dollar

INTERBANK trading on the money markets on Wednesday saw the Kwacha slip against the United States (US) dollar deepening losses suffered the previous day.

The local currency was marginally up from its previous close of between KR5.300 and KR5.320 at the commencement of trading.

According to the Zanaco Treasury Newsletter, the local unit held flat in early trade but gave up gains in the latter part of the day as buyers of the dollar dominated the market.

Analysts noted that this dragged the Kwacha to a low trading range of KR5.330 to KR5.350 where it closed.

They observed that the Kwacha was down KR0.03 on the day extending the currency's decline to two consecutive days.

In the near term the local unit was expected to trade on a bearish note with support and resistance anticipated at KR5.300 and KR5.400 respectively.

The market saw a KR132.9 jump in liquidity levels, rising to KR723.9 million from the previous day's KR591.5 million with the volume of funds traded slightly decreasing to KR151.5 million from KR156.9 million.

The world metal markets experienced a fall in prices while other global commodities trade showed a slight increase in oil prices.

According Reuters the copper prices on the London Metal Exchange (LME) dipped on Wednesday as the euro fell against the dollar and US retail data disappointed investors.

Benchmark three-month copper on the London Metal Exchange closed at US$8,226 a tonne, down from a last bid of US$8,236.

Gold prices on the world market fell below US$1,650 an ounce after data showed disappointingly small growth in US retail sales in January, while some investors stayed at the sidelines ahead of a G20 meeting later this week, which is expected to set the tone for the gold trade.

The metal price index showed that spot gold fell 0.5 per cent to US$1,641.74 an ounce.

Oil prices rose slightly to close near US$119 a barrel and remain close to a nine-month high, though gains were capped by a rise in US crude oil inventories and as the International Energy Agency (IEA) trimmed its demand outlook.

March Brent futures settled 6 cent up at US$118.72 a barrel, having earlier touched a session high of $119.12.

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