Dollar Strength Weighs on Copper Prices Ahead of Fed Decision

Copper prices fell on Tuesday due to a strong dollar and rising expectations of an interest rate hike by the Federal Reserve.

The benchmark three-month copper contract on the London Metal Exchange dropped 0.9% to $13,605 in official open outcry activity.

While Sucden Financial noted that individual supply stories are still constructive, supporting base metals, they also warned that a stronger dollar and high U.S. yields could limit price gains.

The market is awaiting the outcome of the Fed meeting on Wednesday, with 62% of market participants expecting interest rates to remain steady, while 38% expect at least a 25-basis-point hike.