Copper slips on currency moves

Print this page Posted on : 11-04-2009 by recycleinme.com

Bloomberg Nov. 3 Copper fell in London as the dollar strengthened and Australia's second interest-rate increase in a month fanned concern about the removal of economic-stimulus measures. The Dollar Index, a six-currency gauge of the greenbacks performance, advanced as much as 0.6 per cent to its highest intraday level since Oct. 5. A stronger dollar makes metals priced in the currency more expensive for holders of other monies. Australia's Reserve Bank raised its benchmark lending rate by a quarter percentage point to 3.5 per cent. There is growing concern there will be less liquidity in the future, Mr Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone. The commodity sector will be one of the most hit, because it is a risky asset class and it has attracted a lot of hot money. If this money is taken out of the market, I don't see why prices will stay at these levels. Copper for three-month delivery fell $150, or 2.3 per cent, to $6,405 a tonne on the London Metal Exchange at 10:31 a.m. local time. Prices have dropped 4.9 per cent from a 13-month high of $6,732 on Oct. 26. December-delivery copper slid 1.5 per cent to $2.91 a pound on the New York Mercantile Exchanges COMEX unit. Stocks up Prices also fell as inventories of metal in LME-monitored warehouses rose 0.4 per cent to 373,800 tonnes. Stockpiles have increased 8 per cent over the past month to the highest level since May 12. Among other LME metals for three-month delivery, aluminium fell 1.3 per cent at $1,891 a tonne, zinc shed 2.1 per cent to $2,150 a tonne, and lead slid 2.7 per cent to $2,235 a tonne. Tin fell 1.2 per cent to $14,600 a tonne, and nickel dropped 2.1 per cent to $17,680 a tonne.

Source : Business Line