Copper edged higher, tracking small swings in the United States dollar as investors continue to assess the outlook for U.S. monetary policy.
The industrial metal was marginally higher on the London Metal Exchange , trimming an earlier gain of 0.9 per cent as a Bloomberg gauge of the dollar partially rebounded from a two-week low.
Copper and other metals came under pressure in June as the dollar rallied on the back of signals that policymakers will pursue tighter monetary policy. But bets on rate hikes have been pared back this week after Federal Reserve Chairman Kevin Warsh on Wednesday said price risks are coming down.
Higher rates act as a headwind to metals demand by raising borrowing costs for manufacturers, while a strong dollar makes commodities like copper more expensive for buyers using other currencies.
“The dollar retreated following the decline in oil prices and weakening U.S. employment data, which is benefiting copper ,” said Li Xuezhi, head of research at brokerage Chaos Ternary Futures Co. “But the upsides will remain limited by continued weakness in traditional industries.”
In other metals, aluminum traded little changed, having dropped back to pre-war levels on expectations of returning supplies from the Middle East. More vessels have been transiting the Strait of Hormuz since the U.S. and Iran struck an interim peace deal last month, paving the way for smelters in the region to start ramping up operations.
Copper was 0.3 per cent higher at US$13,364 a ton on the LME as of 1:07 p.m. local time. Aluminum was little changed at US$3,089.50 a ton, while tin jumped 2.1 per cent.
—With assistance from John Deane.