COPPER PRICES SLIP
LONDONcopper prices eased yesterday as a rise in Covid-19 cases and tighter restrictions around the world dampened the prospect of a swift global economic recovery.
This is after the copper futures ended lower on Wednesday due to concerns over demand following fading optimism about the progress of a Covid-19 vaccine, says Absa Bank Zambia. According to Absa Bank,
a higher dollar makes dollar-denominated commodities more expensive for holders of other currencies.
Yestarday, three-month copper on the London Metal Exchange edged down 0.2 percent to US$6,923 a tonne on track for a weekly loss of 0.3 percent.
This was despite crossing a key US$7,000-level to hit a 29-month high of US$7,054 a tonne on Monday.
Meanwhile, Zambia Industrial Commercial Bank (ZICB) indicated that the Kwacha continued to trade within a tight range with only marginal movements seen during the day.
According to ZICB, the local currency in early trade was being quoted at 20.86/20.91, unchanged from its previous day’s closing levels.
“The currency pair closed at 20.87/20.92, a tad softer compared to the day’s opening levels. Market liquidity is currently K3.1 billion, compared to K2.9 billion the previous day,” ZICB said.
ZICB said the dollar dipped as investors appeared to waver between optimism and caution over expectations about a Covid-19 vaccine that was unlikely to avert a grim winter in Europe and the United States as the pandemic’s second wave intensifies.
“The dollar index was down 0.15 percent by midday in London, off earlier lows as risk appetite rebounded a little from Asian trading hours. U.S. stock futures pared some of their losses in the run up to the start of trading in New York.
“Europe is grappling with surging infections and new Covid-19 restrictions, with Germany’s economic advisers trimming next year’s growth outlook.
New York has ordered bars and restaurants to close early as U.S. cases hit record levels,” ZICB said.