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Kwacha in wide trading range

THE Kwacha is expected to maintain a wide trading range in the immediate term amid a further drop in copper price on the global market, financial players predict.
Yesterday, the price of Copper which is the major Zambia’s export earner fell to its weakest since May 2009.
According to Reuters, the London Metal Exchange (LME) copper was little changed at US$4,638.50 a tonne on Friday, but had gained 1.3 percent so far in the week, on track to snap a six-week fall.
“It dropped to US$4,443.50 on Monday [yesterday], its weakest since May 2009,” the Zanaco Daily Treasury Newsletter indicates.
Analysing the local currency market, Zanaco notes that, “The Kwacha is likely to keep a wide trading range in the near term although activity is likely to thin out as the month comes to a close.”
In economic terms, trading range refers to for instance,  when a stock breaks through or falls below its trading range after several days of trading in a range, it usually means there is momentum (positive or negative) building.
On Friday, the Kwacha added to its gains against the dollar on buoyed by slackening dollar demand and inflows of hard currency from corporates sellers and the interbank market.
“From an open of K10.55/10.57 per dollar, 35 ngwee higher than the previous day’s close of K10.90/10.92, the Kwacha was propped up to a fresh high of K9.94/9.96 by strong dollar selling by corporates and the interbank whilst demand waned in comparison,” the newsletter notes.
The high was short-lived as market players rushed to buy the cheaper dollar which pushed it to K10.36/10.38 where it closed for the day- up 51 ngwee on a closing basis.
A survey at most bureaux de change showed that the Kwacha was trading in the range of K10 and K10.75.
Some stakeholders are optimistic over the Kwacha’s outlook premised on the positive economic recovery plan announced by President Lungu last week during a press conference.