BS: Copper Rises for Second Day as Dollar Drops Before Fed Decision
Nov. 2 (Bloomberg) -- Copper rose for the second straight day after the dollar dropped as the Federal Reserve prepared more stimulus measures to bolster the U.S. economy.
Policy makers, who meet today and tomorrow, probably will announce a plan to purchase at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News. The greenback fell as much as 0.7 percent against a basket of major currencies. Raw materials extended a rally to the highest level since October 2008.
Increased debt purchases and a lower dollar will be “supportive forces for commodities across the board,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “Copper is in the driver’s seat to the upside.”
Copper futures for December delivery gained 4.8 cents, or 1.3 percent, to $3.833 a pound at 10:01 a.m. on the Comex in New York. Before today, the metal jumped 32 percent since July 1 as the dollar slumped and metal inventories dropped.
Copper may extend a rally next year as demand outpaces supplies and “loose monetary policy” bolsters commodities, John DeAngelis, the director of metals strategy at Deutsche Bank AG, said at a conference today in the Chinese city of Ningbo.
On Oct. 27, copper rose to a 27-month high of $3.90. Today, the Thomson Reuters/Jefferies CRB Index of 19 raw materials extended a rally to the highest level in two years as the dollar’s slump bolstered the investment appeal of energy, crops and metals and boosted prospects for U.S. exports.
Copper may “regress” depending on whether the Fed announcement meets expectations by investors, Klopfenstein said. “We may see a trade above $3.95 or below $3.73.”
On the London Metal Exchange, copper for delivery in three months rose $119.25, or 1.4 percent, to $8,419.25 a metric ton ($3.82 a pound). Tin, lead, nickel, aluminum and zinc also gained on the LME.
--Editors: Patrick McKiernan, Steve Stroth
To contact the reporters on this story: Yi Tian in New York at Ytian8@bloomberg.net; Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
