Maravi

Copper price down

Copper price down
By Chiwoyu Sinyangwe
Mon 05 Dec. 2011, 13:40 CAT

UNDER-pressure kwacha is this week expected to continue on the bearish trajectory as local demand for US dollars heightens driven by global market dynamics. The local currency that closed last week in the K5,105 band is this week is expected to trade up to K5,140 amidst high levels of fluctuation.

And copper price declined by 1.3 per cent to US $7,772.50 a tonne last week, pointing towards slowing manufacturing growth which depressed demand for copper.

According to Zanaco, the kwacha closed last week trading at K5,085 and K5,105 for bid and offer, down K5 on Friday as traders reacted to a global weakening of the US dollar following a coordinated move by central banks of major economies to reduce the cost of borrowing in dollars.

"However, the kwacha was unable to hold on to gains as thin supply of the dollar in local markets failed to sustain demand," stated Zanaco.

"It is anticipated that the interbank lending rate will continue on an upward movement. In the near term, the kwacha is expected to be range bound fluctuating trend, given the low liquidity levels in the market within K5,030 and K5,140 boundaries for bid and offer."

And copper price on the international market has rallied the most in a month on strong US economic data and moves by central banks to increase global financial liquidity.

But poor Chinese manufacturing data trimmed some of the optimism spurred by a move by major central banks to aid distressed European lenders.

Last week, China, the world's biggest consumer of copper, released its official purchasing managers' index for November, which fell to 49, down from October's 50.4.

A reading above 50 indicated economic growth, while a reading below 50 points to contraction.

Copper for three-month delivery on the LME was down 1.3 per cent to $7,772.50 per tonne.

Copper's downside was also limited by upbeat data in the United States, the world's largest economy.

The US has churned out some promising economic data; most recently the US' manufacturing data set a bullish tone.by 1.3%

Labels: COPPER, KWACHA

posted by MrK @ 6:35 PM