FX:Copper rebounds from 1-week low after PMI’s, Greece hopes
Forexpros - Copper futures regained strength on Wednesday, rebounding from a one-week low following the release of data showing slowing contraction in euro zone manufacturing activity, while renewed optimism over talks between Greece and its bondholders provided further support.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.816 a pound during European morning trade, gaining 0.69%.
It earlier rose by as much as 0.86% to trade at a session high USD3.824 a pound. Prices fell to a one-week low of USD3.763 a pound on Tuesday.
The euro zone’s purchasing managers index rose to 48.8 in January, compared to a preliminary reading of 48.7 and up from 46.9 in December. Germany PMI’s came in at 51.0, indicating expansion and above an earlier estimate of 50.9.
Also Wednesday, manufacturing activity in the U.K. improved more-than-expected in January, expanding at the fastest pace since May. The index rose to 52.1, expanding for the first time in four months.
Europe as a region is second in global demand for the industrial metal. Manufacturing numbers are used as indicators for future copper demand growth.
Meanwhile, the U.S. dollar came under pressure after Greek newspaper Kathimerini reported that the head of the IMF mission to Athens said talks on a new loan program for the country will conclude within a matter of days.
An agreement is necessary for Greece to secure its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.37% to trade at 79.14.
Gains were limited amid concerns over the health of China’s economy. The country’s official manufacturing purchasing managers’ index rose to 50.5 in January from 50.3 in December.
However, a separate report from HSBC indicated that Chinese manufacturing activity contracted for the third consecutive month.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for April delivery rose 0.37% to trade at USD1,747.05 a troy ounce, while silver for March delivery rallied 1.4% to trade at USD33.73 a troy ounce.
