Kwacha experiences mixed trading in June, as copper prices struggle on the London market

The Kwacha has incurred both gains and losses in June’s trading sessions with an overall appreciation of 10.48 percent.

This is largely due to positive sentiments over debt restructuring negotiations and significant United States dollar inflows from the Bank of Zambia.

The financial market, therefore, anticipates that the local currency would trade with the forces of demand and supply determining the direction of the local currency performance.

Access bank Zambia in its daily market update indicated that: “the Kwacha was struggling against the US dollar in Thursday’s trading session. It opened at K17.3888/17.4388 and closed at K17.4631/17.5119 on the market average interbank bid and offer respectively.”

And, Absa bank Zambia stated that the local unit posted minor losses in Thursday’s trading session on sustained appetite for the greenback from large corporates and merchandize importers.

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“Opening the day at K17.375/17.425 per dollar on the bid and offer respectively, the local unit traded at K17.425/17.475 in the afternoon session, 5 Ngwee weaker than the opening, and traded on the same levels until close of business day.

“Near term, we expect activity to pick up with the direction of the local unit likely to be determined by how much dollar inflows the market will receive from corporates converting for upcoming tax obligations amidst relentless corporate greenback demand,” the bank stated.

Meanwhile, the report states that copper prices hit a one-month low on Thursday, hurt by a strong dollar, concerns about higher interest rates denting global economic growth and signs of weak demand in top metals consumer China.

It stated that three-month copper on the London Metal Exchange was down 1.3 percent at US$8,152 per metric tonne, after hitting US$8,141, its lowest since June 1.

The prices, however, rose on Friday on Chinese stimulus hopes, but were set for the biggest quarterly fall since September 2022 on weak China data and prospects of further United States rate hikes.

Three-month copper price on the London Metal Exchange rose 0.9 percent to US$8,246.50 per metric tonne, but was down 8.3 percent from the previous quarter.

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