--Lower oil prices, stronger dollar hem in trader appetite for copper
--ECB cuts its euro-zone growth forecast for 2013, now expects recession
--Traders keep watch on fiscal-cliff talks, worry about lack of progress
By Tatyana Shumsky
NEW YORK--Copper futures slipped off a six-week high Thursday amid forecasts of slower euro-zone growth, bearish sentiment in other economically sensitive commodities and concerns about the slow progress of U.S. deficit talks.
The most actively traded contract, for March delivery, fell 1.20 cents, or 0.3%, at $3.6745 a pound on the Comex division of the New York Mercantile Exchange.
The contract had climbed to a settlement of $3.6865 a pound, its highest since Oct. 18, amid signs that China and the U.S., the world's largest consumers of the metal, were on track for economic growth.
But copper futures were on the back foot a day later, as declines in crude-oil prices eroded investor appetite for risk. Copper and crude oil can move in the same direction, as demand for both commodities is affected by shifts in economic outlook.
January-delivery light, sweet crude traded down $1.40, or 1.6%, at $86.48 a barrel on the Nymex.
The European Central Bank cut its euro-zone growth forecast for 2013, putting further pressure on copper prices. The ECB is now predicting a contraction of 0.3% next year, a sharp downward revision from the prior forecast of 0.5% growth, made only three months ago.
Copper is widely used in making household appliances, cars and consumer electronics, and demand for such products tends to fall when the economy is contracting.
A stronger U.S. dollar, which advanced against the euro, also weighed on copper prices. The euro was recently down 0.4% at $1.3014.
Copper is traded in dollars and becomes more expensive for investors who use other currencies when the dollar rallies.
Investors also remain on watch for any progress from Washington, where lawmakers continue to wrangle over ways to reduce the U.S. budget deficit. Republicans and Democrats must come to an accord before year end, in order to avoid triggering automatic spending cuts and tax increases that could cause a recession.
"Turnover has been rather subdued however, reflecting a market that has fallen back into wait-and-see mode while fiscal cliff negotiations continue and ahead of key economic data," said Leon Westgate, senior commodity strategist with Standard Bank, in a note.
