Most industrial metal prices rose on Wednesday as hopes of a slower pace of U.S. interest rate hikes buoyed global stocks and weakened the dollar, making greenback-priced metals cheaper for buyers. with other currencies.
The weak economic data released in the United States the day before reinforced the feeling among investors that the Federal Reserve will tighten its policy less aggressively and, therefore, inflict less damage on the economy and the demand for raw materials.
In China, the world’s largest consumer of metals, the yuan posted its biggest daily rise against the dollar since 2020, as a change in US rate expectations was coupled with news that state-owned banks were selling dollars to stabilize the coin. The yuan fell to its lowest level since 2007 on Tuesday.
At 0959 GMT, benchmark copper on the London Metal Exchange (LME) was up 1.4% at $7,627.50 a tonne, and aluminum was up 3.1% at $2,283.50.
However, copper and aluminum have lost 30% and 45%, respectively, from the highs reached in March, driven by a slowdown in global economic growth that weakened demand for metals, weighed on stock markets and boosted the dollar to 20-year highs.
“The market is enjoying the tailwind of dollar weakness”, said Ole Hansen, an analyst at Saxo Bank.
However, he said confirmation of a Fed change of direction will be needed to convince investors that the worst of the tightening is over and that, without it, metal prices are unlikely to rise much.
In other base metals, LME zinc rose 1.3% to $2,283.50 a tonne; nickel gained 0.7% to US$22,475; lead advanced 0.7% to US$1,882.50; and tin was down 0.2% at $18,450.
With information from Reuters
Source: Elcomercio
I have worked as a journalist for over 10 years and have written for various news outlets. I currently work as an author at 24 News Recorder, mostly covering entertainment news. I have a keen interest in the industry and enjoy writing about the latest news and gossip. I am also a member of the National Association of Journalists.