Copper Heads for Longest Rally in Five Months; Dollar Drops
Source: BusinessWeek, Anna Stablum and Millie Munshi (6/14/10)
"With the dollar crashing, it's adding a boost to all the commodities."
The greenback fell as much as 1.3% against a basket of six currencies. The gauge dropped 0.8 % last week. Copper also rose on renewed optimism the global economy will continue to expand. The Reuters/Jefferies CRB Index of 19 raw materials rose to a four-week high.
"With the dollar crashing, it's adding a boost to all the commodities," said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. "The global economic momentum is still positive, and demand will be strong."
Copper futures for July delivery rose 7.5 cents, or 2.6%, to $2.979 a pound at 10:15 a.m. on the Comex in New York, poised for the fifth straight gain, the longest rally since early January. The metal climbed 3% last week.
A report showed European industrial production increased more than economists forecast in April, easing concern a debt crisis in the region will derail the recovery. The MSCI World Index of shares gained as much as 1.3%.
"Friendly equity markets, a weaker dollar, some optimism and bargain-hunting" lifted metals," said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt.
Before today, copper dropped 13% this year as Greece, Spain and Portugal struggled with budget gaps and China moved to cool its property market.
Copper for delivery in three months advanced 2.2% to $6,620.75 a metric ton ($3 a pound) on the London Metal Exchange. Aluminum, tin, nickel, lead and zinc prices also gained.