Copper price renews two-week top as softer USD joins supply concerns
- Copper prints three-day uptrend despite recession fears, pre-Fed anxiety.
- Downbeat USD, fears of lesser supplies from China, Peru also underpin recovery moves.
- US Consumer Confidence, slowdown chatters can entertain traders ahead of FOMC.
Copper prices remain on the front foot as markets cheer softer US dollar, as well as chatters surrounding more supply constraints ahead. That said, the red metal’s futures on the COMEX rises for the third consecutive day to $3.41, up 1.55% intraday during early Tuesday morning in Europe.
It’s worth noting that the three-month copper prices on the London Metal Exchange also rise around 1.5% as bulls attack the $7,600 mark. Further, the metal’s most-traded September contract on the Shanghai Futures Exchange (SFE) advanced 2.1% to 58,350 yuan ($8,640.86) a tonne.
That said, the US Dollar Index (DXY) drops for the fourth consecutive day, paring intraday losses around 106.40 by the press time. Recently, a rebound in the US 10-year Treasury yields, down 2.8 basis points near 2.79%, appears to favor the US dollar in consolidating the daily losses. However, softer US data and fears of economic slowdown, recently favored by the global rating giant Moody’s weigh on the US dollar.
Elsewhere, Chinese miner MMG Ltd said on Monday, per Reuters, that it had suspended its copper production targets for the year following a 60% output drop due to a long protest at its Las Bambas mine in Peru, which significantly disrupted operations.
Anticipated declines in the world’s biggest copper producer’s output, namely Peru, also tease the metal buyers amid hopes of a supply crunch.
On the contrary, fears of recession and heavy inventories in China, as well as the dragon nation’s inability to regain economic traction, also keep the copper buyers in check. “China’s economic slowdown is spilling over to major exporting nations in Europe and East Asia through falling demand for manufactured goods, causing Germany and South Korea to post rare deficits with the world’s second-largest economy,” said Bloomberg.
Looking forward, the US CB Consumer Confidence for July, prior 98.7, will precede Wednesday’s Federal Open Market Committee (FOMC) meeting to decorate the calendar. Also important will be the chatters surrounding the recession.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
