FX.co ★ Copper Rises as Risk Appetite Improves

On Monday, copper futures surged past $5 per pound, marking a one-week high. This increase is attributed to a renewed risk appetite fueled by optimism over a potential resolution to the historic U.S. government shutdown. The Senate recently approved initial funding for key departments and agencies; however, it excluded a Democratic initiative aimed at extending enhanced tax credits under the Affordable Care Act. Additionally, copper prices benefited from a weaker dollar, as a lower dollar makes commodities priced in dollars more affordable for international buyers. In another development, the Trump administration has added 10 minerals, including copper, to its list of materials deemed critical for the U.S. economy and national security. Copper is crucial for the development of electric vehicles, power grids, and data centers. Moreover, there is speculation that Beijing may target the copper refining industry in its campaign to address overcapacity. This follows a recommendation from China’s nonferrous metals association to impose stricter regulations on new smelting projects.