LONDON: Copper steadied on Wednesday after hitting a one-week low earlier in the session as investors moved into the safety of the dollar before the release of the minutes from the U.S. Federal Reserve’s most recent policy meeting.
The dollar hit a one-week high versus a currency basket thanks in part to a bouyant two-year Treasury note yield, which hit a nine-year high as traders awaited the release of the Fed minutes.
The last readings of U.S. wages and inflation came in higher than expected. Investors are now waiting to see if the Fed policy minutes due later on Wednesday will signal a quicker pace of interest rate increases than previously expected.
“There are still good indications that inflation might edge up and force the Fed to hike more than three times (this year),” said Peter Fertig, a consultant at Quantitative Commodity Research.
“All in all, the fundamentals still look supportive for copper. The economic situation in China is not that bad, but there could be turbulence coming from the slide out of risky assets into safe havens.”
Source: Brecorder.com
