Copper tumbles as US Jobs data boost dollar, sapping demand
Tuesday, 9 June 2009
NEW TORK, June 8 (Bloomberg): Copper prices fell after a report showed US employers cut fewer jobs in May than economists expected, boosting the dollar and eroding demand for commodities as an inflation hedge.
The greenback jumped as much as 1.8 per cent against a basket of six major currencies. Metals and other raw materials often move in the opposite direction of the dollar. The Reuters/Jefferies CRB Index, which include copper, dropped for the third time in four days.
"The stronger dollar is causing weakness in commodities across the board," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago.
Copper futures for July delivery slid 1.7 cents, or 0.7 per cent, to $2.284 pound on the Comex division of the New York Mercantile Exchange.
The metal still climbed 3.9 per cent this week, the third straight gain. The price has surged 62 per cent this year on signs that the global slump in the economy may be easing.
US employers cut 345,000 jobs in May, the fewest in eight months, the Labor Department said. Economists in a Bloomberg News survey projected a loss of 520,000 jobs, the median of 76 estimates.
"The jobs number was pretty bullish, but it seems now that more people are looking at the dollar," Zeman said.
Still, the employment data helped to limit today's losses in copper, said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
The report "adds to the euphoria people have, thinking that the worst is over" on the economy, McGhee said.
Last year, the US, Europe and Japan tumbled into the first simultaneous recession since World War II. A report this week showed manufacturing in China, the world's biggest metals user, expanded for a third straight month in April.
Commodity-focused mutual funds attracted $798 million in the week ended June 3, the most since February 2008, Cambridge, Massachusetts-based researcher EPFR Global said yesterday in a report. Funds investing in natural resources excluding energy have drawn more than $6 billion this year, EPFR said.
On the London Metal Exchange, copper for delivery in three months fell $45, or 0.9 per cent, to $4,980 a metric tonne ($2.26 a pound).
On the LME, aluminum gained 0.5 per cent to $1,572 a tonne. Nickel fell 0.7 per cent to $14,600. Lead rose 0.5 per cent to $1,675. Zinc dropped 0.6 per cent to $1,565, and tin was up 0.5 per cent to $14,775.
The greenback jumped as much as 1.8 per cent against a basket of six major currencies. Metals and other raw materials often move in the opposite direction of the dollar. The Reuters/Jefferies CRB Index, which include copper, dropped for the third time in four days.
"The stronger dollar is causing weakness in commodities across the board," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago.
Copper futures for July delivery slid 1.7 cents, or 0.7 per cent, to $2.284 pound on the Comex division of the New York Mercantile Exchange.
The metal still climbed 3.9 per cent this week, the third straight gain. The price has surged 62 per cent this year on signs that the global slump in the economy may be easing.
US employers cut 345,000 jobs in May, the fewest in eight months, the Labor Department said. Economists in a Bloomberg News survey projected a loss of 520,000 jobs, the median of 76 estimates.
"The jobs number was pretty bullish, but it seems now that more people are looking at the dollar," Zeman said.
Still, the employment data helped to limit today's losses in copper, said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
The report "adds to the euphoria people have, thinking that the worst is over" on the economy, McGhee said.
Last year, the US, Europe and Japan tumbled into the first simultaneous recession since World War II. A report this week showed manufacturing in China, the world's biggest metals user, expanded for a third straight month in April.
Commodity-focused mutual funds attracted $798 million in the week ended June 3, the most since February 2008, Cambridge, Massachusetts-based researcher EPFR Global said yesterday in a report. Funds investing in natural resources excluding energy have drawn more than $6 billion this year, EPFR said.
On the London Metal Exchange, copper for delivery in three months fell $45, or 0.9 per cent, to $4,980 a metric tonne ($2.26 a pound).
On the LME, aluminum gained 0.5 per cent to $1,572 a tonne. Nickel fell 0.7 per cent to $14,600. Lead rose 0.5 per cent to $1,675. Zinc dropped 0.6 per cent to $1,565, and tin was up 0.5 per cent to $14,775.