Weak ECB outlook and higher dollar weigh on copper
Topics: From the Wires, News
A worsening outlook for global growth and a stronger dollar sent the price of copper lower Thursday.
Copper logged its biggest decline in more than a month, falling 1.1 percent to finish at $3.6445 a pound.
The European Central Bank warned of another gloomy year for the 17 countries that use the euro. The bank said it now expects the euro zone’s economy to contract 0.3 percent next year, versus its previous forecast for 0.5 percent growth. Copper had been advancing in recent weeks on speculation that growth in China, the world’s second-largest economy, had bottomed out and was set to pick up.
The price of copper, which has many industrial uses, tends to track the outlook for global growth.
The dollar also advanced against the euro and other currencies, further weighing on the price of copper. Commodities are typically priced in dollars, and fall if the U.S. currency strengthens.
“People constantly mention the concern about growth moving forward, most notably in Europe,” said Dave Meger, director of metals trading at Vision Financial Markets in Chicago. “Today, specifically Europe is in focus but, all-in-all, copper has been relatively supported.”
The ECB’s muted outlook also affected other commodities trading, pushing down the price of oil and other energy contracts.
Benchmark oil fell $1.62, or 1.8 percent, to finish at $86.26 per barrel in New York. Heating oil for January dropped 4.75 cents, or 1.6 percent, to $2.9432 per gallon and wholesale gasoline fell 4.09 cents, or 1.6 percent, to $2.5969 per gallon. Natural gas for delivery in January fell 3.4 cents, or 0.9 percent, to $3,666 per 1,000 cubic feet.
Precious metals edged higher.
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