Aluminium falls as Fed tightening heralds weaker economy

LONDON, Oct 21 (Reuters): Aluminium prices were set to end the week almost 5% lower on Friday as fears of rapid U.S. interest rate rises dampened the outlook for economic growth and metals demand.

Stock markets fell, U.S. 10-year bond yields hit their highest since 2007 and the dollar strengthened, pressuring metals by making them costlier for buyers with other currencies. MKTS/GLOB

In China, the biggest metals consumer, the yuan fell to its weakest level against the dollar since 2008.

Philadelphia Federal Reserve President Patrick Harker suggested the central bank will "keep raising rates for a while" and U.S. economic data showed persistent labour market tightness.

Also pressuring aluminium was the delivery of around 250,000 tonnes into the London Metal Exchange's warehouse system in the last ten days, which pointed to ample supply.