Weaker dollar pushes copper higher


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LONDON — Copper prices rose on Tuesday alongside global stock markets and oil as investors bet that central banks would slow the pace of interest rate rises and the dollar weakened, making dollar-priced commodities cheaper for buyers with other currencies.

In China, the yuan strengthened and equities rose after an unverified note circulated on social media saying that the government plans a March lifting of the strict COVID-19 restrictions that have stifled economic growth.

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China is by far the biggest metals consumer.

Benchmark copper on the London Metal Exchange (LME) was up 3% at $7,670 a tonne in official trading, with one trader saying the rise was fueled by buying in Asia and increased risk appetite across markets.

The dollar was down 0.7% against a basket of major currencies, the Brent crude oil benchmark gained nearly 3% and global equities were up about 0.7%.

However, copper prices have still fallen 30% from their March peak, pressured by a sharp economic slowdown.

Data on Tuesday showed global factory output weakened in October as recession fears, high inflation and China’s zero-COVID policy hurt demand. In China, data beat expectations but still showed that factory activity contracted.

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Weighing on metals demand in China are COVID prevention measures in numerous cities and a continuing property market slump.

Brokers at Marex said the removal of COVID restrictions should strengthen the yuan — helping metals prices — but that copper prices have yet to hit a bottom.

Markets were braced for an economically damaging 75 basis point increase to U.S. interest rates on Wednesday but the Federal Reserve’s forward guidance could signal slower rises ahead.

The head of the European Central Bank said further interest rises would come despite the growing probability of a euro zone recession.

LME aluminum was up 1.4% at $2,253.50 a tonne, zinc rose 1.9% to $2,749, nickel gained 4.5% to $22,800, lead added 1.1% to $1,995 and tin was up 2.7% at $18,100. (Reporting by Peter Hobson Additional reporting by Mai Nguyen in Hanoi Editing by David Evans and David Goodman )


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