RTRS: METALS-Copper falls on dollar, caution over U.S. jobs report
* Dollar rises on hawkish tone in Fed minutes
* Physical buyers still absent from metals market - analyst
* Coming up: U.S. nonfarm payrolls, Dec; 1330 GMT
By Susan Thomas
LONDON, Jan 4 (Reuters) - Copper fell on Friday as the
dollar rose after the U.S. Federal Reserve flagged concerns
about the risks of its stimulative monetary policy, and on
caution ahead of jobs data that could prompt the Fed to end the
programme sooner than expected.
The minutes from the U.S. central bank's December policy
meeting, published on Thursday, showed some policymakers want to
slow or stop its asset purchase plan before the end of this
year, due to worries about financial stability.
The Fed's monetary easing programme has been a big factor
underpinning risk appetite, and a strong jobs number could
increase chances the central bank could halt its purchases.
The U.S. nonfarm payrolls report is expected to show the
American economy added 150,000 jobs in December, according to a
Reuters survey of economists, up from November's 146,000.
The hawkish tone of the minutes drove the dollar higher. The
currency is often favoured at times of market uncertainty, and
strategists have said it could make further gains in the coming
weeks.
Three-month copper on the London Metal Exchange was
$8,062 per tonne in official rings from a close of $8,154 on
Thursday.
"The dollar has strengthened and the euro rally has run out
of steam. Asian investors and banks have been dumping the euro
so I think it's run into that kind of headwind," Citi metals
analyst David Wilson said.
A stronger dollar makes dollar-based assets more expensive
for non-dollar investors and its rise also hit precious metals
and oil.
Copper is still heading for a 2.5 percent gain this week,
after surging to its highest in more than two months on
Wednesday in a broad financial markets rally after the U.S.
Congress struck a deal to avert a fiscal disaster.
"I guess there was some exuberance, because the U.S. did not
fall off the cliff. But there is not much consumer business at
the moment and none of the physical players are rushing back
into the market and booking metal," Wilson said.
"We need to settle and get more positive macro data under our
belts to see in which direction we're heading."
U.S. unemployment has come down steadily after hitting a
peak of 10 percent in late 2009, but remains at 7.7 percent.
Officials have said they will keep interest rates near zero
until the unemployment rate falls to 6.5 percent for as long as
estimates of medium-run inflation do not exceed 2.5 percent.
"The idea that a retrenching of the U.S. fiscal easing may
come to an end leading to higher interest rates is cause for
concern, but we feel it offers a buying opportunity for selected
commodities," RBC said in a research note.
"Base metals in particular have been hit reasonably hard
after rallying strongly on the first day of the New Year."
CHINA
Next week, China is expected to release data on inflation,
trade and new loans, which will offer insight into the health of
an economy that is a top consumer of many raw materials
including copper.
"We won't see the high-speed growth in China as in the
past," said a Shanghai-based trader. "We are still in the
post-crisis mode and the global recovery is slow and fragile,
which doesn't support a major rally in copper."
In other metals, three-month zinc was $2,053.5 per
tonne in rings from $2,088 at the close on Thursday, lead
was $2,354 f r om $2,399 and aluminium was $2,086
from $2,116.
Nickel was $17,400 from $17,500 and tin,
untraded in rings, was bid at $23,925 per tonne f rom $23,980.
Metal Prices at 1306 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
move
COMEX Cu 367.00 -4.05 -1.09 365.25 0.48
LME Alum 2090.25 -25.75 -1.22 2073.00 0.83
LME Cu 8072.50 -81.50 -1.00 7931.00 1.78
LME Lead 2351.75 16.75 +0.72 2330.00 0.93
LME Nickel 17394.00 -106.00 -0.61 17060.00 1.96
LME Tin 23950.00 -30.00 -0.13 23400.00 2.35
LME Zinc 2055.25 -32.75 -1.57 2080.00 -1.19
SHFE Alu 15315.00 -50.00 -0.33 15435.00 -0.78
SHFE Cu* 58210.00 440.00 +0.76 57690.00 0.90
SHFE Zin 15540.00 20.00 +0.13 15625.00 -0.54
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
