Futures Market News
Rising dollar hits copper futures where it hurts
Oct 30, 2010 05:09 PM
The dollar rose as investors backed out of risk positions and prepped themselves for the Federal Reserve's Open Market Committee meeting next week. The central bank is expected to announce an asset-purchasing program - quantitative easing - designed to raise flagging macro-economic demand. The best-case scenario for copper would be a truly massive QE program, which would push down the value of the dollar while (hopefully) priming the economic pump for firmer growth.
On the Chicago Mercantile Exchange, high-grade copper futures for December 2010 delivery lost 4.1 cents to trade at 3.7465 per pound. Longer-term March 2011 futures slipped 4 cents to 3.759 per pound.
In fact, the supply and demand fundamentals underlying "Dr. Copper" suggest that most trading is currently revolving around dollar expectations right now.
"The combination of a potential strike at [the Chilean copper mine] Collahuasi and the launch of copper exchange-traded funds is adding to what is already a bullish outlook for copper," Dan Major, an analyst at RBS Global Banking & Markets in London, told Bloomberg News Friday. "Despite these fundamental factors, dollar strength will likely lead to further copper-price weakness."
Don’t Miss Our News Updates!
Follow our breaking news stories and get a unique take on current events that may impact the commodity futures markets. Multiple new articles are posted each weekday. Subscribe to our commodity news updates by email, and receive real-time updates with our RSS feed, follow us on Twitter @DanielsTrading, become a fan on Facebook to stay informed.
SPECIAL OFFER: Receive Your FREE Grain Futures eBook
Download “Inside the Grain & Oilseed Markets” today!
Whether you are new to the agricultural commodities industry or a seasoned trader, it is important to have a solid understanding of the markets to assist you and your trading strategies. From its unique specifications to its key fundamentals, learn how this important sector came to be.
Register for Your Free 2-Week Trial of the dt Insider Market Advisory!
With your free trial membership, you'll receive full access to our exclusive trade recommendation service and all of the timely and accurate trade information you need to feel comfortable participating in the markets.