Copper Lifted as Dollar Weakens
Source: Reuters (4/14/10)
"Copper rose towards the psychological $8,000 level on Wednesday"
Official growth data from China, the world's top metals consumer, is due on Thursday but a further boost to buyers came as sources said earlier the country's economy grew about 11.9% in the first quarter, topping expectations.
Copper for three-months delivery on the London Metal Exchange closed at $7,950 a ton, up $50 from Tuesday, while fund buying boosted nickel to its highest in almost two years.
"Copper is higher as the dollar is weaker because of general rally in risk," said analyst David Thurtell at Citi. "That was related to good earnings numbers overnight. . .and Singapore's revaluation."
The U.S. currency eased after Singapore effectively revalued its currency—seen as a mark of confidence in economic recovery. A weaker dollar makes metals priced in the U.S. currency cheaper for holders of other currencies.
Dollar losses were extended to a session low against both the yen and the euro after Federal Reserve Chairman Ben Bernanke failed to raise expectations of higher U.S. interest rates, disappointing some investors.
Positive news on the macroeconomic and company results front offered support for sentiment. JPMorgan Chase & Co's first-quarter profit topped Wall Street expectations, as revenue from its investment bank overshadowed losses on consumer loans.
From a technical perspective, copper seen to be stuck in a range but may break to the upside, while the wave count on the charts favors a possible start of a fifth wave rally.
"With many metals now at new highs, there is certainly a positive feel about the place," said one LME trader.