Copper closes mixed with Fed, strong dollar and China on radar

Copper did not display a single signal today, amid assessments of yesterday’s decision (20) by the Federal Reserve (Fed, the American central bank) and its potential effects on activity. Statements about potential stimulus from China were in focus, but the strong dollar curbed appetite for the metal.

Copper for May closed up 0.17%, at US$4.0585 a pound, on Comex, the metals division of the New York Mercantile Exchange (Nymex). Copper for three months fell 0.45%, to US$ 8,954.50 a ton, on the London Metal Exchange (LME), at 2:20 pm (Brasília time). The picture was more positive in the morning, with investors in general assessing that the Fed’s decision was dovish, that is, less aggressive. Even with the maintenance of interest rates and also warnings about inflation uncertainties, the American Central Bank maintained the prospect of three interest cuts this year.

In exchange, however, the dollar strengthened today. This makes the metal, priced in American currency, more expensive for holders of other currencies and tends to restrict demand. This Thursday, the Bank of England (BoE) maintained monetary policy, while the Swiss Central Bank cut its base rate, surprising part of the market.

Still in today’s news, the deputy of the People’s Bank of China (PBoC), Xuan Changneng, suggested that there may be more monetary easing and called for more support for technological innovation. Xuan said there is room to reduce the amount of money that creditors must keep in their reserves, and also commented that falling interest rates in the world’s main economies should make China’s monetary policy more independent.

Among other metals traded on the LME, a ton of aluminum rose 0.81%, to US$2,302; lead fell 0.72%, to US$2,055; nickel fell 0.26%, to US$17,525; tin rose 1.99%, to US$27,895; and zinc rose 0.08%, to US$ 2,525.

* With information from Dow Jones Newswires