Dollar conversion cushions Kwacha

US dollars

EXPORTERS’ conversion of their United States (US) dollars into Kwacha has assisted the local currency to stabilise while copper prices on the international market continue to rise.
First National Bank (FNB) says despite the happenings on the global market that are negatively affecting the local unit, there is adequate dollar supply to support the Kwacha.
“One gets the feeling that dollar supply is adequate to give the local unit some support… even in the midst of all the happenings that are generally Kwacha negative.
“Conversions to meet Kwacha obligations have helped the unit. Many exporters are also encouraged by the high levels. Initial support remains the K7.50 handle,” the bank says in its daily newsletter.
On Thursday, the trading session witnessed the Kwacha swing between K7.50 and K7.52 and K7.52 and K7.54, the range it was trading for most of the week.
Meanwhile, Access Bank in its morning digest says the Kwacha opened trading at K7.52 and K7.54, the level it closed at on Thursday, while Cavmont Bank notes that the local unit closed trading at K7.52 and K7.54, K0.02 weaker than Wednesday’s closing level.
In its market report, Cavmont Bank says the Kwacha remained resilient and made marginal movement against the dollar on the day.
It says the Kwacha opened trading at K7.52 and K7.54 but failed to track its peers which strengthened against the greenback after disappointing employment data out of the US.
Meanwhile, copper prices on the London Metal Exchange (LME) rose on Thursday buoyed by signs of healthier growth prospects for the metal’s top consumer, China, and a sliding dollar after weak US monthly jobs data.
Three-month copper on the LME ended up at US$5,795 a tonne from US$5,775 at the close on Wednesday.
Hong Kong’s Argonaut Securities analyst Helen Lau said  expansion at US factories was set to support copper demand while evidence that China’s economy stabilised in June, given Beijing’s supportive fiscal measures, was also expected to underpin demand in the second half.
“We expect to see a continuous recovery in copper prices ahead,” she said.

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