By BUUMBA CHIMBULU
LONDON copper prices have edged higher in positive territory for the second session, as the Kwacha remains broadly weak and is projected to trade at this level for the rest of the week.
Markets have indicated that London copper prices edged higher on Wednesday, in positive territory for the second session.
This is ahead of United States Federal Open Market Committee’s decision on interest rates, according to the Zanaco Daily Treasury newsletter.
“Three-month copper on the London Metal Exchange (LME) added 0.1 to US$9,808.5 a tonne by and the most-traded copper contract on the Shanghai Futures Exchange rose 0.5 percent to 70,160 yuan a tonne,” the bank stated.
This development comes after the copper price fell on Monday under pressure from risk-off sentiment in global markets.
According to Mining. Com, the most-traded copper contract on the Shanghai Futures Exchange lost 1.1 percent to 70,480 yuan (US$11,131.64) a tonne.
On Monday, activity on the LME’s copper contract shrank by 7.0 percent last year, making it the second poorest performer among the London market’s core base metals suite.
Meanwhile, the Kwacha has continued to defy expectations of resilience in the absence of strong economic fundamentals.
The financial market still anticipated the Kwacha to remain broadly weak for the rest of the week.
“Zambia’s Kwacha inched lower on Tuesday as corporate demand continue to overwhelm the market amidst dwindled supply.
“The local currency opened trading at K17.6000/17.6500 per dollar, and gradually slipped to end the day at K17.6500/17.7000 per dollar on the bid and offer respectively,” according to Zanaco bank.
And Absa bank Zambia market update stated that as month-end conversions continue, the local unit was expected to continue posting minor losses on the back of high dollar demand
It showed that the Kwacha traded in a tight band in Tuesday’s session as the market witnessed pockets of dollar inflows from cooperates converting mainly for payroll obligations but could not match the growing demand.
“At market open, the Kwacha was quoted at K17.600/K17.650 per dollar and posted minor losses on a close to end the business day at K17.650/17.700 on the bid and offer respectively,” it stated.
The Zambia Industrial Commercial Bank (ZICB) however showed that the expectation was that Kwacha would receive support from this week’s month-end conversions.
