FX.co ★ Copper Falls as Strong Dollar Weighs

Copper futures fell toward $6.20 per pound on Thursday, nearing a fresh four-month low, as the US dollar strengthened on growing expectations of more aggressive Federal Reserve rate hikes following hotter-than-expected inflation data. Increasingly hawkish comments from Fed officials further bolstered the greenback, weighing on dollar-denominated commodities such as copper by making them more expensive for buyers using other currencies. Additional downward pressure came from rising inventories on the London Metal Exchange, which climbed to around 320,000 tons by mid-November, up sharply from August’s low of 205,000 tons. Even so, tighter physical supply in China lent some support, with domestic import premiums rising to record highs in recent weeks. China has also struggled to rebuild its stockpiles as significant volumes of copper have been redirected to the US in anticipation of potential import tariffs.