Copper drops on dollar strength, zinc hits 2.5 year low
Wednesday, 11 June 2008
LONDON, June 10 (Reuters): Copper fell on dollar strength, which also battered other industrial metals with zinc hitting a two and a half year low.
Prices were lower even as China, the world's biggest copper consumer, returned to trading after a national holiday Monday.
Dollar strength sparked selling as it made base metals more expensive for those trading in weaker currencies.
"The base metals complex is lower thus far and continues to take directional cues from moves in oil, gold and the dollar plus the summer slowdown continues to aid bearish short term sentiment," said Alex Heath, head of base metals trading at RBC Capital Markets."
Direction is most likely to be drawn from inventory numbers from the LME, released daily, currency markets and data from the United States which may confirm the world's biggest economy is headed or in recession.
Today's LME data showed copper stocks across the world fell 600 tonnes which went some way in limiting losses.
Meanwhile, the dollar continued to make gains against other currencies as the start of trading in the United States saw investors buy into the greenback after some hawkish comments by U.S. Federal Reserve chairman Ben Bernanke overnight.
"The dollar is up sharply again ... and this time, taking its toll on metals," said MF Global analyst Ed Meir. "Given the quiet conditions in terms of news, we expect the price bias in metals to be on the downside over the next few days, as the dollar should continue to gain ground," he added.
Prices were lower even as China, the world's biggest copper consumer, returned to trading after a national holiday Monday.
Dollar strength sparked selling as it made base metals more expensive for those trading in weaker currencies.
"The base metals complex is lower thus far and continues to take directional cues from moves in oil, gold and the dollar plus the summer slowdown continues to aid bearish short term sentiment," said Alex Heath, head of base metals trading at RBC Capital Markets."
Direction is most likely to be drawn from inventory numbers from the LME, released daily, currency markets and data from the United States which may confirm the world's biggest economy is headed or in recession.
Today's LME data showed copper stocks across the world fell 600 tonnes which went some way in limiting losses.
Meanwhile, the dollar continued to make gains against other currencies as the start of trading in the United States saw investors buy into the greenback after some hawkish comments by U.S. Federal Reserve chairman Ben Bernanke overnight.
"The dollar is up sharply again ... and this time, taking its toll on metals," said MF Global analyst Ed Meir. "Given the quiet conditions in terms of news, we expect the price bias in metals to be on the downside over the next few days, as the dollar should continue to gain ground," he added.