As manufacturers continue to come back to work, markets are a little mixed at this time. Although we have seen no major fluctuations on the LME, notably the USD has lost ground on a world stage with the Australian dollar gaining almost 1c in the past 24 hours. That may not seem like all that much, however it does make a difference to pricing of all commodities very quickly. Consider this;
Copper USD7300 with FX @ 0.895 = AUD8156/t
Copper USD7300 with FX @ 0.905 = AUD8066/t
Therefore a difference of almost AUD100/t with only 1c difference in the exchange rate.
In trading news it’s worth noting that Chinese are now factoring in the fact that at the end of this month comes the Chinese New Year where most factories shut down for the biggest holiday and festival of the year, I have attached a short article for your interest.
**** DJ Copper Prices Edge Up as Dollar Eases ****
By Tatyana Shumsky
NEW YORK–Copper futures rose on Monday as the dollar gave up earlier gains and investors continued to weigh the effect of recent U.S. employment data on the likely path of monetary policy. The most actively traded contract, for March delivery, rose 0.50 cent, or 0.2%, to settle at $3.3465 a pound on the Comex division of the New York Mercantile Exchange.
Futures advanced as the dollar retreated against a basket of international currencies, giving up earlier gains. The ICE Dollar Index was recently at 80.629, down from 80.752 earlier. Copper is priced in dollars and becomes less expensive for investors who use other currencies when the dollar weakens.
Copper traders continued to focus on U.S. nonfarm payrolls data, released Friday. The report showed a surprise drop in labor market growth last month, casting doubts on the Federal Reserve’s plans for winding down its stimulus efforts.
The weaker data are a “double edged sword” for copper prices, which can benefit from sustained Fed stimulus but suffer if copper demand falls as economic activity slows down, said Dave Meger, director of metals trading with futures brokerage Vision Financial Markets LLC in Chicago. ”Copper is so closely tied to the economic recovery that any hint of weakness is a concern,” Mr. Meger said.