Forexpros – Copper futures rose for the first time in three days on Wednesday, as the U.S. dollar came under pressure ahead of the conclusion of the Federal Reserve’s policy-setting meeting later in the day.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.591 a pound during European morning trade, jumping 2.54%.
It earlier rose by as much as 3.1% to trade at a daily high of USD3.629 a pound.
The Fed’s Open Market Committee was to conclude its two-day policy meeting later in the day, with Fed Chairman Ben Bernanke conducting the bank’s post-meeting press conference.
Commodity traders will pay close attention for any hints regarding the introduction of further stimulus measures to revive the U.S. economic recovery and bolster growth.
The U.S. dollar came under pressure, boosting the appeal of commodities. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.4% to trade at 77.12.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Copper prices found further support after China’s Non Ferrous Metals Industry Association said earlier that the nation’s refined copper consumption for the first nine months of this year rose 8% to 5.46 million tonnes.
Comments from the nation’s Vice Finance Minister Li Yong also helped ease fears over a ‘hard landing’ in China after saying that the nation’s economy was on the right track and the government will take a flexible policy approach to dealing with the risks it faces.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, markets eyed a meeting between German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou, scheduled for later in the day on Athens’ surprise decision to vote on its latest bailout deal.
If Greece rejects the deal it would put the next tranche of aid to Athens in jeopardy, moving the country towards the brink of default and increasing the risk of contagion in global financial markets.
Elsewhere on the Comex, gold for December delivery jumped 1.33% to trade at USD1,734.55 a troy ounce, while silver for December delivery surged 3.47% to trade at USD33.86 a troy ounce.
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