Oct 09, 2012 (Dow Jones) NEW YORK--Copper futures settled unchanged Tuesday as a rally in the dollar offset gains made on China's decision to boost liquidity.
The most actively traded contract, for December delivery, settled at $3.7180 a pound on the Comex division of the New York Mercantile Exchange.
A stronger dollar, which rallied sharply against the euro, forced copper futures to give up their early session gains. The euro recently traded down 0.8% against the dollar at $1.2867, and well below the psychologically important $1.30 level.
Copper is traded in dollars and becomes more expensive for investors who hold other currencies, deterring interest in this market.
Earlier in the day, copper prices had rallied to $3.7530 as investors cheered China's moves to bolster liquidity in its financial system. The People's Republic Bank of China pumped 265 billion yuan ($42.14 billion) into the money market Tuesday--the second-biggest liquidity injection of its kind.
The accommodative measures aim to cut borrowing costs for companies and come in addition to the CNY2.418 trillion the PBOC has infused into domestic money markets since late June.
"It's going to make money more readily available," said Ira Epstein, director of the Ira Epstein division at the Linn Group. "I think their focus is to make sure internally, they're getting growth."
Copper traders had tipped China's monetary actions as likely to lift the country's demand for copper. China is the world's top consumer of the industrial metal used in construction and manufacturing.
Copper settlements (ranges include electronic and pit trading):
Oct $3.7290; up 0.20 cent; Range $3.7185-$3.7525
Dec $3.7180; unchanged; Range $3.7070-$3.7530