January 10, 2020 / 12:24 PM / a month ago

METALS-Strengthening dollar curbs copper rebound

(Updates with closing prices)

By Peter Hobson

LONDON, Jan 10 (Reuters) - Copper was up by more than 1% for the week on Friday as fears of conflict in the Middle East diminished and exchange inventories continued to dwindle, though prices were kept in check by a stronger dollar.

Benchmark copper on the London Metal Exchange (LME) rose 0.3% to $6,198 a tonne in final open-outcry trading and had gained 1.1% this week. It had dropped 1.4% the previous week after a U.S. air strike killed an Iranian commander and Tehran threatened revenge.

“After the Iran issue calmed down, investors’ risk appetite returned to copper,” said ING analyst Wenyu Yao. “Inventory has been drawn down, supporting prices, but the upside momentum is weakened by a strengthening dollar.”

The dollar was up 0.6% this week against a basket of major currencies, making metals priced in the greenback more expensive for buyers with other currencies and potentially weakening demand.

EQUITIES MARKETS: Global shares set record highs on Friday as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved economic growth.

DOLLAR: The U.S. dollar is likely to remain strong this year, Reuters polling of FX strategists found.

TRADE: U.S. President Donald Trump said on Thursday a phase one trade deal with China could be signed shortly after Jan. 15.

PAYROLLS: U.S. job growth slowed more than expected in December, but the pace of hiring remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in manufacturing.

FEDERAL RESERVE: The jobs data will probably not change the Federal Reserve’s assessment that both the economy and monetary policy are in a “good place.” Fed officials had said the economy may have weathered the worst.

JAPAN: Core machinery orders in Japan are likely to have risen in November after four months of decline, a Reuters poll showed.

COPPER STOCKS: Headline inventories in LME-registered warehouses fell by 3,100 tonnes to 132,725 tonnes, down from nearly 340,000 tonnes in August. MCUSTX-TOTAL

Stocks in warehouses monitored by the Shanghai Futures Exchange fell 5.4% from last Friday to 133,745 tonnes. CU-STX-SGH

POSITIONING: Speculators reduced their bets on lower prices. Their net short in LME copper had fallen to 6.5% of open contracts by Tuesday, from 17% late last month, broker Marex Spectron said.

TIN: Indonesia’s December exports of refined tin rose 23% year-on-year to 6,447 tonnes, data showed.

NORSK: Metals maker Norsk Hydro said it expected its sales of low-carbon aluminium made from recycled drink cans and other scrap to more than double this year and to increase further in 2021 and beyond.

OTHER METALS: LME aluminium rose 0.1% in closing rings to $1,806 a tonne; zinc eased 0.1% to $2,375; lead added 0.1% to $1,931; nickel advanced 0.8% to $14,190; and tin, untraded in rings, was bid down 0.2% at $17,225.

All but aluminium were up over the week. (Reporting by Peter Hobson; Additional reporting by Tom Daly; Editing by David Goodman, Mark Potter and Pravin Char)

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