IV:Copper futures edge higher as dollar weakens ahead of U.S. data
Investing.com - Copper futures edged higher in rangebound trade on Wednesday, getting some support from a modest fall in the U.S. dollar, as investors awaited the release of key U.S. economic data later in the day.
Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to scale back stimulus.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.230 a pound during European morning trade, up 0.35%.
Comex copper prices traded in a range between USD3.206 a pound, the daily low and a session high of USD3.233 a pound.
The March contract settled 0.34% lower on Tuesday to end at USD3.219 a pound.
Copper prices were likely to find support at USD3.206 a pound, the low from November 25 and resistance at USD3.268 a pound, the high from November 25.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.15% to trade at 80.52, the lowest since November 6.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
The U.S. was to release data on durable goods orders as well as a report on manufacturing activity in the Chicago region and revised data on consumer sentiment later in the session.
In addition, the Labor Department was to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.
The release of mixed U.S. economic data on Tuesday did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.
Data showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere on the Comex, gold for February delivery rose 0.9% to trade at USD1,252.50 a troy ounce, while silver for March delivery advanced 0.95% to trade at USD20.08 a troy ounce.
