Sep 15, 2011 NEW YORK (Dow Jones)--Copper futures spiked to the day's highs after the European Central Bank announced new dollar liquidity measures.
The ECB said that major central banks including the U.S. Federal Reserve, Swiss National Bank, Bank of Japan and the Bank of England will make a coordinated push to improve European banks' access to dollars.
Copper futures for December deliver, the most actively traded contract, roared to $3.9800 a pound and was recently trading up 7 cents, or 1.8%, at $3.9680 on the Comex division of the New York Mercantile Exchange.
Thinly traded September-delivery copper was up 6.50 cents, or 1.7%, at $3.9500 a pound.
The central bank announcement comes amid reports that major European banks are struggling to access dollars and growing concern that Europe's sovereign debt crisis is spreading to the region's financial system.
Copper is widely considered an economic bellwether with changes in price direction indicating shifts in the economic cycle. The red metal is used in making everything from laptops and air conditioners to household plumbing and tractors, and demand for copper tends to wane when business activity slows.
"There is much debate at the moment about how much of an impact on demand the current sovereign debt crisis will have and many have become convinced we are headed for another recession which will be negative for base metals," said traders at RBC Capital Markets.