News based selling was witnessed in Copper during last week. Positive China import numbers did little to change the course for Copper. Now the increase of CPI in China at 32-month high and lingering problems in Europe relating to higher prices has questioned the rise of base metals especially Copper. Eurozone annual inflation rose to 2.7% ahead of ECB comfort limit of 2%. This has increased the expectations of sharper rise in interest rates. ECB has already lifted the benchmark interest rates by 25 basis points to 1.25% on 7 April 2011.
The other problem is that higher interest rates will raise borrowing costs for debt-laden EU nations Greece, Ireland, Portugal and Spain. Destabilized EURO will ensure that the Copper prices stay away from the all time highs of $ 10190 per tonne. Dollar settled at 1.44278 on 15 April 2011 as compared to 1.4479 on 8 April 2011. On Monday, Dollar is seen in green trading at 1.4382 against the EURO and looking promising to show further strength as the day progresses.
COMEX Copper is seen trading marginally up from last week at $ 4.27 per pound, up 1 cent. Last week, MCX Copper contract for April expiry declined by 5% to close at Rs. 417 per kg, on 15 April 2011 as against Rs. 440 per kg on 8 April 2011.
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