Dollar demand slumps, as Kwacha expected to appreciate, driven by month end obligations by large firms

The money market has witnessed a slump in United States Dollar trading while the demand for hard currency has maintained its highs.

The Kwacha is anticipated to trade range bound as the market approaches month-end expecting the large corporates to offload for various end of month obligations.

This is according to Access Bank daily market update for Monday.

“The Kwacha closed slightly weaker against the US dollar in Friday’s trading session.

“It opened at K19.420/19.470 and closed at K19.450/19.500 on the market interbank bid and offer respectively,” the bank stated.

Meanwhile, the bank noted that copper prices in London were on track for a third straight weekly decline on Friday due to disappointing economic data from top consumer China and ongoing woes in its property sector.

It indicated that three-month copper on the London Metal Exchange eased 0.3 percent to US$8,210 per metric tonne in official open-outcry trading.

“The metal, used in power and construction, is down one percent so far this week,” according to the bank.

Meanwhile, industry platform, mining.com indicated that copper headed for a third straight weekly loss tracking a broad slide in global risk assets as concerns about China’s economy and widening housing crisis put markets in bearish mood.

According to the platform, the red metal steadied on the London Metals Exchange on Friday.

“Pessimism over China’s growth prospects is building after the country’s state-owned property developers warned of widespread losses, fueling concerns turmoil is spreading from the private sector.

“The Chinese real estate sector is a globally significant source of metals consumption and a crucial driver of the country’s economy. A gauge of major LME contracts is near its lowest since May as the gloom over the demand outlook intensifies,” it stated.

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