Kwacha continues to reverse losses against the dollar

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SUN BUSINESS REPORTER writes

@SunZambian           

The Zambian Kwacha was firm and continued to reverse earlier losses to close strong against the dollar on Monday for a second straight session, helped by healthy dollar conversions by corporate firms.

According to Barclays Bank Zambia market update, at the 15:30 hours market close, commercial banks quoted the Kwacha at K13.10/13.15 against the dollar on the bid and offer respectively.

 The local unit is likely to trade steady with bias to gain as clients begin to prepare to meet salary obligations.

On money market, the bank reported that, Barclays reported liquidity levels in the money market continued to decrease on Monday to close at K544.98 million from K708.20 million seen the previous day and the volume of funds traded on the interbank also took a similar turn moving from K 575.50 to K565.00 million.

The cost of borrowing continued to be firm at 10.23percent.

 It further reported that the Market was fairly quiet and settlement for the bond auction was done yesterday.

On international scene, the bank reported that oil prices fell more than 1percent on Monday after more poor Chinese economic figures fanned fears of lower worldwide oil demand.

Prices have fallen around 20percent since a 2019 high reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data. Brent crude futures lost $1.07 to settle at $60.94 a barrel, a 1.73 percent loss.

U.S. West Texas Intermediate (WTI) crude futures fell 58 cents to settle at $51.93 a barrel, a 1.10 percent loss.

Gold prices slipped further from last week’s 14-month peak as investors awaited further clues on interest rates from a U.S. Federal Reserve meeting due to begin on June 18.

Spot gold fell by 0.2 % to $1,338.84 per ounce at 1249 GMT on Monday, after hitting $1,358.04, its highest since April 11, 2018, on Friday. U.S. gold futures also eased 0.2%, to $1,342.40 an ounce.

On metals, the bank reported that copper prices recovered on Monday, boosted by a mine strike and weak Chinese output, but other industrial metals were pressured by nervousness about the damage to growth and demand from the U.S.-China trade dispute.

Benchmark copper on the London Metal Exchange (LME) gained 0.5percent to $5,848 a tonne in closing open outcry trading after earlier sinking to an intraday low of $5,776.

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