London copper prices rose after an emergency rate cut from the US Federal Reserve weakened the greenback, making dollar-denominated metals cheaper for buyers using other currencies.
The Fed cut interest rates by half a percentage point on Tuesday to shield the world’s largest economy from the impact of the global coronavirus epidemic, leading to broad-based selling in the US dollar.
Three-month copper on the London Metal Exchange (LME) rose as much as 1 percent to $$5,725.50 a ton earlier in the session, but eased to trade 0.8 percent higher at $5,711.50 a ton by 0613 GMT.
Meanwhile, the most-active copper contract on the Shanghai Futures Exchange (ShFE) fell 0.8 percent to 45,090 yuan ($6,501.61) a ton.
“The fact that Fed delivered an emergency rate cut confirmed high downside risk for the global economy. Whether the rate cut can stimulate the economy is still a question,” said Yu Xiaojiang, an analyst at Anglo American.
“In the end, we need demand back, which will take time to recover, and not so soon I believe,” he added.– Reuters
