The last week has been a roller-coaster for the AUD/USD with the exchange rate hitting a low of 76.4 on Tuesday shortly after the RBA dropped official interest rates. This turned out to be short lived with the exchange rate bouncing back within 24 hours and is now currently at 78.20.
In the USA, a large steel mill decided (without warning) on Wednesday morning to drop its buying price by $100 tonne, which was quickly repeated across the country and is now being referred to as the “plunge of 2015”.
In China, weak trade data has kept a lid on the Shanghai metal market and with the Chinese New Year starting on Thursday 19 February (Year of the Sheep or Goat .. depending on who you ask) , many traders are already planning their holidays and avoiding market positions.
**** DJ Copper Eases on China Worries **** By Ira Iosebashvili
Copper prices fell Monday, as concerns of slowing demand from China edged out the benefits of a weaker dollar. China’s total imports slumped nearly 20% in January from a year ago, trade data showed, underscoring an economic slowdown that has slammed commodity prices in recent months. China is the world’s largest copper user, making the market vulnerable to any signal of slackening demand there. ”China has not yet taken advantage of the low copper prices to make increased purchases,” Commerzbank analysts wrote in a note. Copper prices fell to a five-and-a-half-year low in January.
“Chinese traders have doubtless been exercising restraint when it comes to imports because of the high level of domestic production — the country’s smelters produced a record 833,000 tons of copper in December,” the analysts said.
The news capped any gains copper received from a weaker dollar. Copper is priced in the U.S. currency and becomes less expensive to foreign buyers when the greenback falls.