Copper gained on Thursday as a broadly weaker greenback supported dollar-priced commodities. On the New York Mercantile Exchange copper for July delivery was up 0.3% on the day and traded at $3.306 a pound. The greenback lost positions against the yen, which lead to a decrease in its value against all other major peers. The dollar index was down 0,3% and traded at 83.41, lowest since May 14.
Dollar and commodities tend to trade inversely. Weakness in the U.S. currency generally drives dollar-priced commodities up as they become more attractive to investors and are cheaper for foreign currency holders.
Copper gains remain limited by Chinas economic slowdown. Copper prices plunged on Wednesday as the IMF cut its economy growth forecast for China to 7.75%, down from 8%. The Organisation for Economic Co-operation and Development also trimmed its forecast to 7,8% from 8%. The Asian nation’s official Purchasing Managers’ Index (PMI) is due on Saturday, but the Advance Purchasing Managers’ Index last week showed a factory activity slowdown. This coupled with Chinese leaders saying they will tolerate a slower, but more ecological friendly, expansion drove copper and iron ore demand and prices down.
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