(Updates prices, adds analyst comment in paragraphs 8-9)
May 3 (Reuters) - Copper dipped during Asian trading on
Wednesday, as investors awaited the U.S. Federal Reserve's
decision on interest rates due later in the day and what
policymakers might signal on future actions amid looming
recession risks.
Three-month copper on the London Metal Exchange
(LME) was down 0.3% at $8,487 a tonne, as of 0611 GMT. It
touched a one-week high of $8,770.15 on Tuesday.
Most other base metals were also down.
LME zinc dropped 0.7% to $2,591 a tonne, aluminium lost 0.6% to $2,352.50, nickel fell 0.4% to
$24,855, lead shed 0.8% to $2,155.50, while tin gained 0.2% to $26,535.
Trading volume, however, remained thin with the Shanghai
Futures Exchange shut for a national holiday. The Chinese bourse
will resume trading on Thursday.
Data on Tuesday showed U.S. job openings fell for a third
straight month in March and layoffs increased to the highest
level in more than two years, suggesting some softening in the
labour market that could aid the Fed's fight against inflation.
The Fed's rate decision will be announced at 1800 GMT, with
investors mostly expecting a 25 basis point hike and looking for
clues on its next steps. "With risks around growth and the labour market growing,
term interest rates and the U.S. dollar are expected to weaken
over coming months," Westpac analysts said in a note.
"By year-end, it is our expectation that the U.S. will
be in recession and inflation will no longer be the pre-eminent
concern. Therefore, the first cut is now expected in December,
with a further 200 bps of easing to follow in 2024."
Worries about a patchy post-COVID economic recovery in top
metals consumer China, and U.S. debt ceiling and banking sector
risks also weighed on markets.
For the top stories in metals and other news, click or (Reporting by Enrico Dela Cruz in Manila; editing by Uttaresh
Venkateshwaran and Sohini Goswami)
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