SUN BUSINESS REPORTER writes
THE Zambian Kwacha lost ground in late trading on Wednesday, lowered by demand for foreign currency from merchandise importers coupled with thin dollar inflows, according to Barclays Bank Zambia daily market update.
Opening the day at K12.510/12.560 to the dollar, the Kwacha weakened gradually throughout the day to close at K12.550/12.600 on the bid and offer respectively.
The local unit was anticipated to trade bearish in the near term but is likely to reverse some of its loses as corporates start to convert dollars for their month end Kwacha obligations.
On money market the bank reported that liquidity levels increased slightly to K609.87 million from K587.20 million and the volumes of funds traded on the interbank reduced significantly to K80.00 million from K186.00 million.
The cost of borrowing funds continued to increase from 10.42percent to 10.48percent.
The local market where relatively unchanged on Wednesday but activity is likely to pick up on the back of today’s Treasury Bill auction.
On international commodity markets, Barclays reported that copper price retreated from a two-week high on Wednesday after U.S. President Donald Trump threatened to impose further tariffs on China, a move which could dent demand for metals.
Three-month copper on the London Metal Exchange (LME) closed 0.5percent lower at $5,980 per tonne, after the metal touched its highest since July 1 in the previous session.
The bank further reported that oil prices steadied after falling more than 3percent overnight, with U.S. crude trailing Brent after U.S. inventory data fell short of expectations, amid conflicting signals from the U.S. and Iran over the disputes that have roiled prices recently.
Brent crude futures were up 16 cents at $64.51, or 0.3percent. They ended 3.2percent down the previous session, after falling to the lowest since July 5.
Gold price slipped on Wednesday as the dollar held near a one-week high on the back of better-than-expected retail sales data from the United States, while investors waited for direction on interest rates from the U.S. Federal Reserve.
Spot gold fell 0.3percent to $1,402.42 per ounce. Prices were on track for a third straight session of losses as robust U.S. data trimmed expectations of an aggressive interest rate cut by the Fed.