Copper Collapses Below $6,000 as Investors Flee From Commodities
Bloomberg News — With assistance by James Poole
Copper sank below $6,000, while the dollar climbed and stocks fell, as investors fret that the Turkish crisis will spill over into emerging markets, hurting demand already threatened by a U.S.-China trade war. Other metals, crude oil and gold declined too. The price of copper fell 1.9 percent to $5,928 a metric ton, the lowest since July last year.
Commodities have been battered by worsening trade tensions between the world’s two largest economies, concern the row will hurt growth in China, the top consumer of raw materials, and by rising U.S. interest rates that have strengthened the dollar and pulled money out of emerging markets.
Gold, normally seen as a haven in times of turmoil, fell 0.6 percent on Wednesday to $1,186.58 an ounce, the lowest since January last year.
Dollar hits 13-month high as Turkey crisis rumbles on
By Reuters Staff
The dollar rose on Wednesday to its highest levels in over a year as a crisis in the Turkish lira that has spread to emerging markets fed demand for the greenback as a safe-haven asset.
Signs the U.S. economy remains robust ahead of an expected interest rate hike by the Federal Reserve next month have seen the dollar dominate other currencies in recent weeks.
A plunge in the lira which has hurt the euro on concerns about European banks’ exposure to Turkey has driven further demand for the dollar along with other safe-haven currencies such as the Swiss franc and the Japanese yen.
The lira has lost more than 40 percent of its value against the dollar this year, hit by worries over President Tayyip Erdogan’s calls for lower interest rates and fraying ties with the United States.
On Wednesday, however, the lira recovered some ground to trade briefly at 5.7503 to the U.S. dollar, firming from a close of 6.3577 a day earlier.
The rebound to below 6.0 against the dollar was driven by a banking watchdog step to limit swap transactions and by hopes of improved EU relations. Turkey’s finance minister will also seek to reassure international investors in a conference call on Thursday.
The rally in the dollar prompted selling in both the euro and the British pound. The single currency drifted down toward $1.13 for the first time since July 2017 (EUR=EBS) and sterling dipped below $1.27 for the first time since June last year.
Oil falls on U.S. stocks rise, weaker economic outlook
By Christopher Johnson
Oil prices fell on Wednesday, weighed down by a gloomier global economic outlook and a report of rising U.S. crude inventories, even as U.S. sanctions on Tehran threatened to curb Iranian crude oil supplies.
Official U.S. oil inventory data was due to be published later on Wednesday by the Energy Information Administration.
Investors are concerned by the health of the world economy at a time of escalating trade disputes between the United States and its major trading partners.
The United States and China have been locked in a tit-for-tat trade spat for a few months, gradually adding tariffs to each others’ products in a dispute that threatens to curb economic activity in both countries.
Chinese oil importers now appear to be shying away from buying U.S. crude oil as they fear Beijing may decide to add the commodity to its tariff list. Meanwhile, investors are watching the impact of U.S. sanctions on Tehran, which analysts say could remove as much as 1 million bpd of Iranian crude from the market by next year.
Risk Disclaimer: The information contained in this market review should not be construed in any way, as containing investment advice and/or a suggestion and/or solicitation for any trading activity and financial transaction. There is no guarantee and/or prediction of future performance. EuropeFX, its affiliates, agents, directors or employees do not guarantee the accuracy and validity of any information or data made available and assume no liability as to any loss arising from any investment based on the same. Trading Forex/CFD’s carries a high level of risk and can result in the loss of your whole investment. Forex/CFD’s are leveraged products and therefore Forex/CFD’s trading may not be appropriate for all investors. It is recommended that you do not invest more money than you can afford to lose to avoid significant financial problems in the case of losses. Please make sure you define the maximum risk acceptable for yourself.