Copper On MCX Settled Up 0.87% At 367.05

Copper on MCX settled up 0.87% at 367.05 recovered from the day's low as prices fell after the Federal Reserve lifted U.S. interest rates and took a more hawkish than expected stance on future policy, boosting the dollar and weighing on assets priced in the U.S. currency. Also the dollar strengthened as expectations for another U.S. rate increase this year were kept alive by a policy statement that indicated huge emergency funds pumped into the economy since 2009 could be trimmed.

Commodity markets were on edge after the Fed raised interest rates and gave some details about its plan to normalize monetary policy this year. The central bank maintained its outlook on one addition rate hike this year and also said it plans to shrink its $4.5 trillion balance sheet “this year.” A hawkish Fed usually bodes well for the U.S. dollar, but this wasn’t the case on Wednesday after multiple economic indicators painted a negative picture of the U.S. economy.

In particular, core inflation rose at the slowest pace since 2015, raising red flags about the Fed’s plans to normalize monetary policy. Support also seen as Copper inventories in London Metal Exchange warehouses fell by another 4,125 tonnes, exchange data showed, taking them to their lowest in more than six weeks.

Meanwhile, market players continued to monitor political turmoil in the U.S. after the Washington Post reported that President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice. Technically market is getting support at 365.1 and below same could see a test of 363.1 level, And resistance is now likely to be seen at 368.2, a move above could see prices testing 369.3.

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Suhani Verma

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