Updates prices, adds comments
Feb 4 (Reuters) – Copper prices rose on Friday, on course for a weekly gain, as a weaker U.S. dollar and low inventories provided strong support despite muted trading during a week-long holiday in top metals consumer China.
Three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.3% at $9,858 a tonne by 0807 GMT, putting it on track for a gain of more than 3% this week.
The dollar index =USD was set for its worst week in nearly two years as the euro tested highs not reached in almost three months, buoyed by Thursday’s hawkish comments from the European Central Bank.
A softer U.S. currency makes dollar-denominated metals cheaper for buyers with other currencies.
“As for LME inventories, the market continues to see outflows in major base metals, which has provided strong support,” ING commodities strategists said in a note.
Copper inventories MCUSTX-TOTAL in LME-approved warehouses, at 82,400 tonnes, have fallen more than 60% from the 2021 peak scaled in August.
In other metals, aluminium CMAL3 rose 0.2% to $3,055 a tonne, zinc CMZN3 advanced 0.6% to $3,616.50, lead CMPB3 climbed 1.2% to $2,217 and tin CMSN3 was up 0.3% at 43,010, while nickel CMNI3 slipped 0.4% to $22,770.
Investors are bracing for U.S. data releases including the unemployment rate and average earnings for January later on Friday.
“A consensus print for both unemployment and earnings will still likely see the Fed pencilling in four (interest rate) hikes in 2022,” said said Tapas Strickland, a director of economics at National Australia Bank.
“A favourable surprise on either would see many in the Fed wondering if they need to act even more aggressively.”
(Reporting by Enrico Dela Cruz in Manila Editing by Sherry Jacob-Phillips and David Goodman)
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