SHANGHAI, May 25 (SMM) – US dollar strengthened after Fed Chair Janet Yellen’s remark re-ignited hope for the interest rate hike. Will copper resume its downward track amid the dollar rebound?
“We consider the impact from the rallying dollar to be short-lived, as the US dollar index will face strong resistance to rise further,” analyst from First Futures told SMM. “Thus, we see Shanghai copper to move sideways in the near term, and chances are slim for prices to break below 43,700-44,000 yuan per tonne.”
Director of Metal Research of Everbright Futures holds that the dollar movements will be among major risk in copper markets, but prices are also subject to market fundamentals.
“It should be noted that the Shanghai Futures Exchange reported continuous declines in copper inventories at its registered warehouses recently,” he added.
Nevertheless, analyst of Minmetals Futures is bearish and expects prices to fall to near the 60-day moving average. “The revised Q1 GDP for the US may prove better than the preliminary reading, and the CPI is picking up its growth, so we expect the stronger dollar to result in continuous copper price declines,” the analyst said in the interview.
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