By BUUMBA CHIMBULU
THE Kwacha extended its rally against the U.S dollar as exporters continued with their dollar conversions to settle their monthly and quarterly tax obligations, Cavmont Bank Zambia has said.
Cavmont in its daily market update, indicated that the local unit began the day trading at K13.87 / K13.92 from a closing level of K13.92 / K13.97.
The local unit seemed poised for further gains but this was short lived as strong demand from importers kicked in and this later saw the local unit being quoted at K14.050/ K14.10.
“In the absence of further supply and high liquidity levels in the money markets, the local unit is likely to continue trading above the US$1/K14.00 mark,” Cavmont said.
And Barclays Bank Zambia said the Kwacha was anticipated to be on the defensive in the absence of healthy dollar supply.
Barclays in its daily market report, said the local unit was quoted at K14.00/14.05 per dollar at close of business from an open of K13.90/13.95 as corporate supply was insufficient to cushion the days demand.
“The Zambian Kwacha weakened on Friday, reversing the gains it made a day ago and it is likely to trade on the back foot in the days ahead due to demand for dollars from importers as market activity begins to pick up,” Barclays said.
Meanwhile, copper prices edged down on Monday as investors exercised caution ahead of the signing of a US-China trade agreement later in the week.
Phase one deal expected to be sealed on Wednesday eases an 18-month trade dispute between the two sides, although negotiations on a second phase deal could go on for months.
Benchmark three-month copper on the London Metal Exchange fell 0.1 percent to US$6,191.50 a tonne, snapping a streak of five sessions of gains.