Forex demand dims Kwacha

BUUMBA CHIMBULU writes THE Zambian Kwacha extended its losses in Friday’s trading session weighed down by strong demand from various sectors who sought for the greenback. According to Absa Bank Zambia, commercial banks in Lusaka at 08:30 hours quoted the local unit at K18.100/18.150 per dollar unchanged from Thursday’s close but showed signs of weakness. “The Kwacha traded on the back foot in the afternoon touching a low of K18.300/18.350 on the bid and offer respectively where it closed for the day,” Absa said in its daily market update. The Bank indicated that with Kwacha appetite reducing as month end conversion dry out, the local unit was likely post minor losses in the near term.   Zambia Industrial Commercial Bank (ZICB) said the Kwacha on Friday remained unchanged with only marginal movements seen during the trading session.  “Activity was rather muted with minimal activity from both importers and exporters, the local currency closed at 18.300/18.350, not far off from its opening levels of 18.275/18.325,” ZICB said in its daily newsletter. Meanwhile, copper prices rose on Monday as United States President, Donald Trump’s response to a China’s security legislation on Hong Kong was not as severe as the market had expected.  Mr Trump on Friday ordered the process of eliminating special United States treatment for Hong Kong. He, however did not mention any action that would undermine the United States-China Phase one trade deal.  Three-month copper on the London Metal Exchange climbed 1.2 percent to US$5,440 a tonne, while the most-traded July copper contract on the Shanghai Futures Exchange jumped 1.4 percent to 44,400 Yuan (US$6,241.65) a tonne. Oil prices edged down on Monday as traders took profits, with the Organisation of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June.  Brent crude fell 15 cents, or 0.4 percent, to US$37.69 a barrel, in the first day of trading in the contract with August as the front month. The Sun