The Kwacha continued on a downward trend on Thursday mimicking further falls in the euro-dollar currency pair, Zanaco Bank reported this morning.
According to Zanaco, the local currency extended losses in early trade as it opened at K5035-5055 against a close of K5005-5025 on Wednesday.
“The Kwacha succumbed to pressure from a stronger dollar bolstered by safe-haven buying on worries over the precarious health of the global economy whilst falling copper prices also weighed on the Zambian currency,” Zanaco stated. “The Kwacha briefly touched a low of K5045-5065 before paring losses to trade around K5025-5045 where it also closed. It was down K20 on the day.”
The local bank predicts that in the near term the Kwacha was expected to take cues from global market developments as well as the presentation of the national budget.
Zanaco also reports that the overnight interbank rate continued to decline on Thursday, touching 6.46 percent from the previous day’s 7.22 percent whilst the volume of funds traded on interbank slightly increased to K112.0 billion, up by K2.5 billion.
Money market liquidity is reported to have gone down to K621.1billion from K651.5 billion on Thursday.
The weekly government treasury bills tender was oversubscribed, receiving bids amounting to K493.8 billion against K250.0 billion on offer.
“K225.8 billion was allocated with yield rates declining on all tenors, the 91 days treasury bills yield rate dropped to 7.36 percent from the last tender’s 8.89 percent while the
364 days dropped to 12.80 percent from 13.49 percent,” Zanaco stated.
Sterling: LONDON, Nov 10 (Reuters) – Sterling edged lower against the dollar and underperformed the euro as worries about the euro zone drove investors to shed exposure to riskier currencies, offsetting any relief seen after the Bank of England kept asset purchases on hold.
Against the dollar, sterling was 0.1 percent lower at $1.5902, easing from highs above $1.5950 struck after the Bank of England announced its policy decision.
Euro: NEW YORK (Reuters) – The euro bounced from a one-month low versus the dollar on Thursday as easing concerns about Italy’s government helped steady the country’s bond yields, lowering fears about a financial bailout.
The euro last traded up 0.3 percent at $1.3586, having earlier hit asession high of $1.3652, according to Reuter’s data.
Rand: JOHANNESBURG (Reuters) – South Africa’s rand gained against the dollar on Thursday after the central bank said the inflation outlook had deteriorated, diminishing some market players’ hopes there could be another rate cut to support a weak recovery.
The rand was trading at 7.94 to the dollar at 1612 GMT, from Wednesday’s New York close of 8.05.
Gold: LONDON (Reuters) – Gold trimmed losses on Thursday on a weaker dollar and as hopes that Italy will soon form a new government to carry out reforms and tackle the deepening debt crisis gave investors a little more confidence to bet on commodities.
Spot gold hit a daily low at $1,753.39 before paring some losses to trade at $1,765.09 an ounce by 10:58 GMT, 0.25 percent down from $1,769.54 late in New York.
Oil: NEW YORK Nov 10 (Reuters) – Brent crude futures rose on Thursday on supportive economic data from the United States and as investors perceived some progress in the efforts to keep Italy’s debt problems from spreading.
ICE Brent December crude rose $1.40, or 1.25 percent, to settle at $113.71 a barrel, having traded from $111.30 to $114.13.
Copper: NEW YORK/LONDON, Nov 10 (Reuters) – Copper extended losses into a fifth day on Thursday, setting itself up for its biggest weekly loss in seven weeks, as demand prospects dimmed from the deepening debt crisis in Europe.
London Metal Exchange (LME) three-month benchmark copper fell to an intraday low of $7,357 per tonne, its lowest since Oct. 24, before its last bid at $7,475, down from Wednesday’s $7,621 close