Business

Copper price rises on London Stock Exchange

TRYNESS TEMBO, Lusaka
THE price of copper on the London Metal Exchange (LME) rose to its highest in two weeks yesterday due to the falling United States (US) dollar to trade at US$4,679 a tonne as the Kwacha broke the K10.00 mark due to the reduction in the supply of the greenback on the market.
Zambia’s major foreign exchange earner rose by 1.3 percent yesterday.
Reuters reports that a weaker dollar makes commodities more affordable for buyers paying with other currencies.
“London copper rose to the highest in two weeks on Wednesday as a falling dollar spurred demand for commodities given fading prospects of a US interest rate hike in September.
“US service sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slowing economic growth that further diminished prospects for an interest rate hike from the Federal Reserve this month,” Reuters reports .
LME copper rose by 1.3 percent to US$4,679 a tonne by 03:16 GMT, after closing little changed in the previous session. Prices topped out at US$4,683, the highest since August 24, and have marked out a floor above US$4,600, a nine-week low hit last week.
The Kwacha is expected to continue under pressure due to a significant reduction in the supply of the greenback.
First National Bank in its daily newsletter says activity in the market remains fairly low.
Zanaco in its daily treasury newsletter also says in the short term, the local unit is expected to be steady with a bearish bias as demand is likely to outweigh supply.
The bank, however, says the depreciation is most likely to be contained by low Kwacha liquidity in the money markets and trading range is expected to be between K9.90 and K10.05.
Cavmont in its market report says the Kwacha closed at K10.05 and K10.10, K0.120 weaker than the day’s opening levels on Tuesday.
On Tuesday, trading session saw the Kwacha breach the K10.00 mark as dollar demand continued to outweigh supply.



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