SHANGHAI, Sept. 15 (SMM) –Markets Wednesday continued to absorb the negative news of escalating European debt crisis, and Moody's credit-ratings downgrade of two major French banks worsened market pessimism, further weighing down LME copper prices. However, markets got news that Italian Congress approved the austerity plan and Greece confirmed not to exit the euro-zone area. Besides, President of the Commission of European Union confirmed to introduce Euro-zone bonds plan very soon, helping the euro rally after falling to 1.3591. In response, the US dollar index slid below 77, which supported LME copper prices. In the evening, the US announced growth in retails sales in August were flat with the prior month, dampening the sensitive LME copper prices, which lost the USD 8,600/mt mark during trading hours. At the tail of trading, even a higher close of US equity markets failed to help narrow the daily declines of LME copper prices, which finally ended at USD 8,619/mt. Position holdings of short investors increased.
Selling pressures of the euro will weaken today after positive news was announced in the Euro-zone area, while the US dollar index will meet resistance at the 5-day moving average following the breakthrough of 77, with limited upward room. Investors’ worries towards Europe’s debt problems have eased, and pressures from currency markets will also weaken. Therefore, LME copper prices will move between USD 8,600-8,750/mt during today’s Asian trading hours. The Shanghai Composite Index will test 2,500 points. Earlier support for the low-end SHFE copper prices is still available, and SHFE 1111 copper contract prices will fluctuate in the RMB 64,900-67,000/mt band.