Copper Extends Fall on Hawkish Fed Bets
Copper futures fell to around $6.4 per pound on Monday, extending last week’s losses to hit six-week lows as firm expectations for a US Federal Reserve rate hike weighed on risk-sensitive assets. Traders increased their bets on a Fed rate increase following Friday’s stronger-than-expected US inflation data, with markets currently pricing in around an 86% probability that the Fed will raise its policy rate by 25 basis points on Wednesday. Oil prices also surged after Saudi Arabia shut down the critical East-West pipeline that bypasses the Strait of Hormuz, raising concerns over inflation. Last Thursday, copper prices plunged nearly 5% following reports that the Trump administration had delayed a decision on tariffs for refined copper imports. US officials were reportedly concerned that the proposed levies could drive domestic copper prices even higher and further increase manufacturing costs.
4 per pound on Monday, extending last week’s losses to hit six-week lows as firm expectations for a US Federal Reserve rate hike weighed on risk-sensitive assets. Traders increased their bets on a Fed rate increase following Friday’s stronger-than-expected US inflation data, with markets currently pricing in around an 86% probability that the Fed will raise its policy rate by 25 basis points on Wednesday. Oil prices also surged after Saudi Arabia shut down the critical East-West pipeline that bypasses the Strait of Hormuz, raising concerns over inflation.
Last Thursday, copper prices plunged nearly 5% following reports that the Trump administration had delayed a decision on tariffs for refined copper imports. US officials were reportedly concerned that the proposed levies could drive domestic copper prices even higher and further increase manufacturing costs.