Kwacha remain weaker against US dollar

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The Kwacha is this week expected to be range bound trading between KR5.300 (K5,300) and KR5.400 (K5,400) for bid and offer respectively.


According to Standard Chartered bank’s daily brief for Monday June 10th, 2013, the rebased Kwacha is currently trading at KR5.3160 (K5, 316) and KR5.4210 (K5, 421) for bid and offer.


Standard Chartered Bank says the Kwacha closed the week slightly weaker from Thursday’s trading against the U.S dollar around KR5.3450 (K5, 345) and KR5.3850 (K5,385) on the Interbank.


The bank says the weak closing of the local unit on the interbank was mainly due to an overall strengthening of the U.S dollar on Friday.


Meanwhile, ZANACO expects the Kwacha to trade lowly with resistance levels of KR5.350 (K5, 350) and KR5.450 (K5, 450) for bid and offer respectively.


According to the ZANACO newsletter of 10 June 2013, the local unit extended its losses against the greenback in thin trading on Friday, touching an intraday low of KR5.375 (K5,375) and KR5.395 (K5,395) on the back of increased demand on the interbank as well as corporate exporters.


This is the rebased Kwacha’s lowest trading levels in the last eight weeks.


“Kwacha opened trading at KR5.350 (K5.350) and KR5.370 (K5,370) on bid and offer respectively but came under pressure as demand for the U.S dollar overwhelmed the light inflows to push the local unit down to KR5.375 (K5,375) and KR5.395 (K5,395). The Kwacha recouped some of its losses to close the trading day KR0.02 down on the day at KR5.370 (K5, 370) and KR5.390 (K5, 390),” the bank said.


On the international money market, Britain’s Sterling Pound fell against the dollar on Friday after an official report pointed to a healthier-than-expected pace of job creation in the United States, helping the dollar recover from recent lows.


The Sterling was down 0.4 per cent on the day against the dollar at $1.5530, some way off Thursday’s peak of $1.5685, which was its highest since mid-February this year.


The Euro fell to the day’s lows against the dollar on Friday after a reasonably healthy U.S. jobs report for May.


The euro touched session lows below $1.32 and was last at $1.3203, down 0.3 per cent.


And South Africa’s Rand ended a volatile week on the back foot against the dollar on Friday, falling through the psychologically key 10 dollar level after U.S. jobs data supported the greenback.


The Rand hit a session low of 10.0700 against the U.S. currency after non-farm payrolls data came out slightly better than expected.

By 1550 GMT, the unit had recovered slightly to trade just below the 10 level, at 9.9950 against the dollar.


Meanwhile, Copper hit a one-week low on Friday after U.S. data showed employers stepped up hiring in May in a show of economic resilience that suggests the Federal Reserve could begin to scale back monetary stimulus later this year.


Three-month copper price on the London Metal Exchange ended down 1.41 per cent at $7,230 a ton, having earlier hit a one-week low of $7,221.


Gold prices extended losses on Friday to fall two per cent after U.S. payrolls data missed expectations, lifting stock markets and the dollar and prompting speculation that the Federal Reserve may scale back its monetary easing policy sooner than expected.


Spot gold was down 2.2 per cent at $1,383.16 an ounce at 13:24 GMT, while U.S. gold futures for August delivery were down $32.40 an ounce at $1,383.40.


And Brent futures posted light gains to hold above $103 a barrel on Friday, supported by a sharp fall in the dollar and expectations the Federal Reserve will stick with its stimulus, setting the contract on course for the biggest weekly gain since late April 2013.


Brent crude gained 13 cents to $103.74 a barrel by 0426 GMT, while U.S. oil rose 5 cents to $94.81.