Copper fell in London as the dollar strengthened amid speculation the Federal Reserve is moving closer to raising interest rates in the U.S., the world’s second-biggest consumer of the metal.
Fed officials are weighing whether the central bank should communicate more of its views about the probable pace of rate increases, minutes of the Fed’s latest policy meeting showed yesterday. Copper also fell after a private gauge of manufacturing in China showed a preliminary reading for this month that was lower than estimated by analysts.
“The Fed is now weighing up its options regarding the probable pace of interest-rate increases next year,” RBC Capital Markets Ltd. said in a note today.
Copper for delivery in March declined 1.1 percent to $2.999 a pound by 7:23 a.m. on the Comex in New York. The contract for delivery in three months fell 0.7 percent to $6,635 a metric ton on the London Metal Exchange. Stockpiles of copper tracked by the LME expanded for a third session to 161,500 tons, daily figures showed.
The dollar rose to a record against a 10-currency basket, data compiled by Bloomberg showed. A stronger dollar makes raw materials priced in the currency more expensive in terms of other monies.
A manufacturing gauge for China, the largest copper consumer, came in at the level of 50 dividing growth and contraction, HSBC Holdings Plc and Markit Economics said. That was below the 50.2 median estimate from analysts surveyed by Bloomberg. A separate euro-area factory measure from Markit fell to 50.4 rather than rising as projected.