Copper may rise in New York, narrowing this quarter’s drop, on reduced concern that a Greek debt default might destabilize banks after lawmakers approved austerity measures.
Greek Prime Minister George Papandreou yesterday won enough votes to pass the first part of a plan aimed at meeting European Union aid requirements. He still must win a second ballot today. Copper, set to climb for a first month in four, also may gain as a weaker dollar spurs demand for commodities as an alternative investment.
The vote “gave a bit of support to the market,” said Nick Riley, head of London Metal Exchange sales at Marex Financial Ltd., one of 12 companies on the LME floor. “The euro is obviously quite strong against the dollar. The dollar weakness is also helping the commodities.”
Copper for September delivery advanced 1 cent, or 0.2 percent, to $4.234 a pound by 7:54 a.m. on the Comex in New York. Prices reached $4.262, the highest level since May 3. Copper for three-month delivery slipped 0.1 percent to $9,315 a metric ton on the LME.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, declined as much as 0.6 percent, sliding for a fourth day. A weaker dollar also makes metals priced in the currency cheaper in terms of other monies.
‘Strong Vigilance’
The euro climbed on prospects the European Central Bank will raise interest rates next week to curb inflation after an increase in April. ECB President Jean-Claude Trichet said this week policy makers are in “strong vigilance mode,” signaling higher borrowing costs.
An ECB rate increase may further weaken the dollar and would be “positive” for metals, Marex’s Riley said.
A report due tomorrow may show manufacturing cooled this month in the U.S., according to economists surveyed by Bloomberg News. Separate figures may reveal a slowdown in Chinese manufacturing in June, another survey showed. The countries are the world’s two biggest copper consumers.
“Questions still remain about the health of the U.S. economy and whether Chinese growth will continue at its previous pace,” Royal Bank of Canada Europe Ltd. said in a report today.
The Federal Reserve’s second round of so-called quantitative easing concludes today. The Fed plans to buy between $4 billion and $5 billion of notes due from December 2016 to June 2018. The purchases will be the last in the central bank’s effort to add $600 billion to the economy, according to its website.
Comex copper is down 1.7 percent for the second quarter, on course for a second straight drop. Prices are up 1.4 percent this month, reducing the metal’s slide in 2011 to 4.8 percent.
Nickel for three-month delivery on the LME gained 0.5 percent to $23,200 a ton after reaching a four-week high of $23,395. Inventories monitored by the exchange fell to 107,148 tons, the lowest level in almost two years.
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