US Dollar Weakness Drives Copper Prices Higher Overnight
The US dollar index weakness has provided support to copper prices in recent trading sessions. Overnight on August 20, the London Metal Exchange (LME) copper price rose by 0.64% to settle at $14,051.5/mt. Trading volume reached 23,000 lots, and open interest stood at 261,000 lots, down 8,415 lots from the previous trading day.
The Shanghai Futures Exchange (SHFE) copper price also increased by 0.23% to settle at 107,230 yuan/mt. However, despite the slight gains, LME inventories continued to rise, capping the upside for copper prices.
The US Treasury Department's announcement to double the size of its long-term bond repurchase operations pushed the US dollar lower, offering support to copper prices. Fundamentally, warrant cargoes were released into the market, keeping spot supply ample. On the demand side, the pullback in copper prices fueled restocking demand from downstream enterprises.
Copper prices are expected to show a narrow and subdued consolidation pattern today.