FX:Copper fluctuates as Greece fears counter China data
Forexpros - Copper futures fluctuated between small gains and losses during European morning trade on Monday, as growing uncertainty surrounding Greece’s bailout plan countered hopes China’s economic recovery was stabilizing.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.450 a pound during European morning trade, up 0.15% on the day.
Prices traded in a range between USD3.458 a pound, the daily high and a session low of USD3.430 a pound. Copper prices fell to USD3.403 a pound on Friday, the cheapest level since August 21.
Investors were jittery as euro zone finance ministers were to meet in Brussels later in the day to discuss whether to release a new tranche of funding to Greece.
Ahead of the meeting, German Finance Minister Wolfgang Schauble told a German newspaper that he did not expect a conclusion to be reached Monday.
Greece’s government approved a budget of spending cuts and tax increases for next year on Sunday, just days after the parliament narrowly approved a EUR13.5 billion austerity package required to secure the country’s next installment of financial aid.
Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
Investors also remained concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Ratings agency Fitch warned last week that the U.S.’s triple-A rating would be at risk if Congress and President Barack Obama did not immediately take action to avoid the crisis.
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011.
Losses were limited following the release of better-than-expected Chinese trade data over the weekend.
The nation’s trade surplus widened more-than-expected in October, as exports grew 11.6%, compared to expectations for a 10.0% increase, while imports rose 2.4%.
The upbeat trade data follows a series of broadly better-than-forecast reports out of Asia’s largest economy after data Friday showed that industrial production rose 9.6% in October, more than the expected 9.4% increase and following a 9.2% rise the previous month.
A separate report showed that consumer price inflation fell unexpectedly last month, ticking down 0.1% after a 0.3% increase in September.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for December delivery added 0.25% to trade at USD1,735.45 a troy ounce, while silver for December delivery added 0.15% to trade at USD32.65 a troy ounce.
