FX:Copper hits 2-week low as global growth fears, stronger dollar weigh
Forexpros - Copper futures were down for a fourth day on Wednesday, slumping to the lowest level in two weeks as ongoing concerns over the outlook for global growth dampened the appeal of growth-linked assets.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.697 a pound during European morning trade, shedding 0.6%.
Earlier in the day, prices fell by as much as 0.65% to hit a session low of USD3.696 a pound, the weakest level since September 26.
Market sentiment remained under pressure after the International Monetary Fund cut its 2012 and 2013 global growth forecasts on Tuesday, and warned of even weaker expansion unless officials in the U.S. and Europe address threats to their economies.
The IMF said that the world economy will grow 3.3% this year, the slowest since the 2009 recession, and 3.6% next year, compared with July predictions of 3.5% in 2012 and 3.9% in 2013.
Copper is sensitive to the economic growth outlook because of its widespread uses across industries. It is used in the construction of buildings, power generation and transmission and the manufacture of consumer electronics.
Investors also remained cautious amid worries over how soon Spain may formally request a bailout and uncertainty over whether international creditors will extend loans to Greece.
Earlier Wednesday, Italy saw yields rise at an auction of short-term government debt, with the yield on 12-month bills climbing to 1.94% from 1.69% previously, the highest level since mid-August.
The risk-off trade environment prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar and Treasuries.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.1% to trade at 80.18. It rose to a one-month high of 80.31 earlier in the session.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
Elsewhere on the Comex, gold for December delivery eased down 0.05% to trade at USD1,764.35 a troy ounce, while silver for December delivery fell 0.45% to trade at USD33.83 a troy ounce.
