Off The Wire
Copper steadies ahead of Fed policy decision
July 29 (Reuters) - London copper shrugged off early losses to trade slightly higher on Wednesday, as base metals were boosted by a softer dollar and hopes of a dovish policy stance from the U.S. Federal Reserve.
Zinc, nickel, aluminium and tin also rose as investors awaited news from the Fed at the end of its two-day meeting on Wednesday, hoping for interest rates to stay lower for longer.
A weaker greenback makes dollar-denominated metals cheaper for holders of other currencies and can lift prices. Low interest rates also usually support commodity prices due to lower inventory financing costs.
"The market seems to be pricing in yet more accommodative policy from the U.S. Fed, while the $1 trillion COVID-19 relief bill ... proposed on Monday provided a further boost," ING wrote in a note.
* COPPER: Three-month copper on the London Metal Exchange was up 0.2% at $6,491.50 a tonne as of 0743 GMT. The most-traded September copper contract on the Shanghai Futures Exchange closed up 0.4% at 51,880 yuan ($7,409.52) a tonne.
* COPPER: On-warrant copper stocks in LME warehouses fell to 44,850 tonnes from around 250,000 tonnes two months ago, the bourse said on Tuesday. The spread between cash and three-month copper was $13 a tonne on Tuesday, cash prices up from $6 on Monday, indicating tighter near-term supply.
* OTHER METALS: ShFE aluminium rose as much as 1.8% to a two-week high of 14,555 yuan a tonne, while ShFE zinc hit its highest since November 2019 at $18,720 a tonne. In London, zinc climbed 1.8% to $2,287 a tonne.
* USD: The dollar hovered just above a two-year low, amid growing worries about the U.S. economy.