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Tuesday, October 26, 2021

Copper falls as dollar firms on Fed taper signals

Copper prices fell on Thursday as the dollar strengthened after the US Federal Reserve said it would begin tapering its stimulus programme as soon as November.

Three-month copper on the London Metal Exchange fell 0.5% to $9,242.50 a tonne by 0357 GMT, while the most-traded October contract on the Shanghai Futures Exchange advanced 0.1% to 68,710 yuan ($10,633.26) a tonne, tracking overnight gains in London.

The Fed said on Wednesday it would likely begin reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected.

The dollar hit its highest in a month after the Fed set the stage for rate hikes next year, far sooner than its developed market peers are expected to move.

A firmer dollar makes greenback-priced metals more expensive to holders of other currencies. Copper is often used as a gauge of global economic health and tapering could slow recovery in the world’s biggest economy.

Fundamentals

LME lead rose 1% to $2,135.50 a tonne while ShFE aluminium advanced 2% to 23,365 yuan a tonne and ShFE tin hit a record 277,800 yuan a tonne on supply worry.

Copper falls as dollar firms on Fed taper signals

Source: Brecorder

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