Kwacha continues to be bullish against the dollar

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SUN BUSINESS REPORTER writes

@SunZambian

THE Kwacha yesterday strengthened for a second consecutive day this week against the dollar amid local currency liquidity tightness and healthy dollar conversions from exporters and other corporates.

 At 15:30 Hrs close of trading, commercial banks quoted the Kwacha at K12.550/12.600 per dollar, 5 Ngwee higher than its opening level of K12.600/12.650.

According to Barclays Bank Zambia Markets Update, the local unit was anticipated to trade steady in the near term. 

 On money markets, the bank reported that  liquidity levels reduced to K364.31 million from K482.16 million on Tuesday with the volumes of funds traded closing at K334.00 million from K225.00 million seen on Monday.

The cost of borrowing funds rose to 10.30percent from 10.28percent mainly due to tight market liquidity.

 The bank  further reported that local market was characterised by very little activity on Tuesday with yields remaining relatively unchanged.

However the  South African rand steadied against the dollar on Tuesday, struggling for momentum as investors awaited clues on U.S. monetary policy from the Federal Reserve officials and domestic data.

Stocks closed lower. At 1500 GMT the rand was trading at 14.1700 per dollar, after closing at 14.1900 on Monday.

On international commodity markets, Barclays reported that copper prices fell to a three-week low on Tuesday even as talks resumed between the United States and China in an effort to resolve the long-running dispute that has sapped metals demand.

Benchmark copper on the London Metal Exchange (LME) ended 1.2percent down at $5,822 an ounce after touching its weakest since June 17.

Gold prices fell on Tuesday as the dollar held near multi-week highs after investors reduced bets on an aggressive U.S. interest rate cut this month.

Spot gold was down 0.3percent at $1,391.65 per ounce.

 On oil prices the bank reported that these slipped at the close of Asian trading Tuesday as concerns of the U.S.-China trade war and its negative impact on the global economy and oil demand outweighed tensions brewing in the Middle East.

Brent futures were $0.58 lower at $64.05/bbl.

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