As traders feel increasingly confident that the U.S. Federal Reserve Bank will expand the monetary base by buying bonds, the dollar is sliding and commodity prices are rising ahead of next week's Federal Open Market Committee meeting.
Copper, a key industrial metal that's highly sensitive to currency fluctuations, rose as a result. Comex copper futures for December delivery gained 8.55 cents to trade at 388.25 cents per pound on Monday morning.
"Copper and the rest of the metals are all predictably higher off the back of a dollar further weakened by the G-20 statements," Alex Heath, head of industrial-metals trading at Royal Bank of Canada Europe, told Bloomberg News.
When the dollar loses ground, it makes dollar-denominated commodities relatively cheaper in other currencies, like the yen and the euro. That drives consumption, raising the price overall.
In addition to the currency effects, there's also concern that a strike in Chile - by far the world's largest producer of the metal - could create a supply deficit. Workers at the Collahuasi mine in Chile will decide this week whether to walk away from work in a union dispute.
