Rubber Declines From Seven-Month High on U.S. Budget Concerns


Rubber retreated from the highest level in more than seven months on concern that U.S. budget talks were deteriorating and as gains in the Japanese currency reduced demand for yen-based contracts.

Rubber for delivery in May lost as much as 2 percent to 282 yen a kilogram ($3,348 a metric ton) on the , before trading at 283.3 yen at 12:38 a.m. local time. The most-active contract settled at 287.7 yen yesterday, the highest price at close since May 10. Futures have gained 7.7 percent this year.

House Speaker John Boehner’s budget proposal would put “too big a burden on the middle class” and  Barack  would veto it, according to White House Communications Director Dan Pfeiffer. Failure to reach a compromise would trigger next month more than $600 billion in spending cuts and tax increases, the so-called fiscal cliff.

“The fiscal cliff negotiation is now in trouble, and that has made the  sentiment ,” said Naohiro Niimura, a partner at research company Market Risk Advisory in Tokyo.

Article continues below Advertisement...

The yen strengthened against all of its 16 major counterparts on the U.S. budget impasse and as the Bank of ends a two-day meeting today, at which it is expected to expand . , used to make synthetic rubber, fell from the highest level in two months.

Rubber for May delivery fell 1.7 percent to 24,845  ($3,989) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board rose 0.5 percent to 96.65 baht ($3.16) a kilogram yesterday, said the of Thailand.

Source: Bloomberg


Please enter your comment!
Please enter your name here