Aug 04, 2011 (Dow Jones Commodities News via Comtex) -- --Comex Sep copper down 2.85c, 0.7%, at $4.2975/lb
--Stronger dollar weighs on copper prices
--EU debt problems, U.S. growth concerns drag prices lower
By Tatyana Shumsky
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A stronger dollar and lingering concerns about economic growth in the U.S. and Europe pressured copper futures to a one-month low.
The most actively traded contract, for September delivery, was recently down 2.85 cents, or 0.7%, at $4.2975 a pound on the Comex division of the New York Mercantile Exchange.
Thinly traded August-delivery copper fell 2.75 cents, or 0.6%, at $4.2925 a pound.
The dollar rallied against a basket of international currencies, pressuring demand for dollar-denominated copper futures among investors holding foreign currencies. As the greenback rallies the contracts appear more expensive to these market participants.
The ICE Dollar Index was recently at 74.867, up 1.4% from 73.858 late Wednesday in New York.
Copper traders are closely watching for developments in Europe, where Italian and Spanish government bond prices remain near record lows. Investors are concerned that these euro zone members will struggle to pay their bills in the coming months and many are worried that the euro-zone rescue fund may be too small to bailout these large economies.
The news has kept copper futures under pressure as the euro zone is often second behind China in the global ranks of copper consumption.
Across the Atlantic, weaker U.S. equity markets are also feeding the negative outlook for copper. The Dow Jones Industrial Average has slumped below the psychologically important 12,000 level in recent days and DJIA futures were trading down 1% ahead of market open.
"With external factors holding increasing sway over copper, the performance of the U.S. equity markets is also becoming a major concern, particularly given the impact that sharp stock market movements have had on commodity prices in recent years," Leon Westgate, base metals analyst with Standard Bank, wrote in a note to clients.
Copper is often called the commodity with a degree in economics because it is used across a plethora of everyday goods, from iPhones to household plumbing, and demand for such goods tends to be closely aligned with economic growth.