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Copper Poised for Big Weekly Loss on Dollar Strength, Disappointing Data

Summary:
Copper futures are slipping on Friday as the industrial metal is poised to record a steep weekly loss. The red metal has come under pressure from a resurging US dollar, as well as an array of disappointing US and European economic data. Copper prices have been skyrocketing this year on a weaker greenback and recovery hopes, but they are now threatening to test .90 again. October copper futures dipped %excerpt%.006, or 0.2%, to .962 per pound at 16:49 GMT on Friday on the New York Mercantile Exchange. Copper will settle the trading week 4.7% lower, paring its year-to-date gain to below 6%. Copper had touched its highest level in two years before slumping below the psychologically important level of . The US dollar is looking to build on its incredible September performance. The US Dollar

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Copper futures are slipping on Friday as the industrial metal is poised to record a steep weekly loss. The red metal has come under pressure from a resurging US dollar, as well as an array of disappointing US and European economic data. Copper prices have been skyrocketing this year on a weaker greenback and recovery hopes, but they are now threatening to test $2.90 again.

October copper futures dipped $0.006, or 0.2%, to $2.962 per pound at 16:49 GMT on Friday on the New York Mercantile Exchange. Copper will settle the trading week 4.7% lower, paring its year-to-date gain to below 6%. Copper had touched its highest level in two years before slumping below the psychologically important level of $3.

The US dollar is looking to build on its incredible September performance. The US Dollar Index, which gauges the greenback against a basket of currencies, surged 0.36% to 94.69, from an opening of 94.32, at 16:50 GMT on Friday. The index will post a weekly increase of nearly 2%, slashing its YTD drop to 1.76%. A stronger buck is bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.

Earlier this week, a barrage of purchasing managers’ index (PMI) readings were released by IHS Markit for the US and European economies. The results were disappointing as they pointed to a slower-than-expected recovery. In the US, the manufacturing PMI jumped to 53.5, the services PMI fell to 54.6, and the composite PMI fell to 54.4. In Europe, the manufacturing PMI edged up to 53.7, the composite PMI declined to 50.1, and the services PMI plummeted to 47.6.

In other data, durable goods orders rose 0.4% in August, down from the 11.7% increase in the previous month, according to the US Census Bureau. The market had penciled in a boost of 1.5%.

The US, eurozone, and China are the biggest consumers of the industrial metal. Copper prices had been climbing on economic recovery hopes in these economies.

The copper market failed to take advantage of reports that Democrats have put together a $2.2 trillion coronavirus stimulus and relief package that could be voted on as early as next week. The White House has signaled that it is willing to work with the Democratic leadership on much-needed relief, but the standstill has weighed on financial markets since the recovery depends on fiscal and monetary measures.

In other metal markets, December gold futures tumbled $12.60, or 0.67%, to $1,864.30 per ounce. November silver futures dropped $0.156, or 0.67%, to $23.04 an ounce. November platinum futures were flat at $838.90 per ounce. November palladium futures declined $13.90, or 0.62%, to $2,213.00 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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