Metals: Stronger Dollar Drags Down Copper

By David Hodari Features Dow Jones Newswires

Copper prices slid on Friday, with the base metals complex closing out an otherwise steady week with losses as the dollar strengthened.

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Copper for December delivery settled down 2.3% at $3.1035 a pound on the Comex division of the New York Mercantile Exchange, closing at the lowest level since Oct. 11.

Meanwhile, gold for December delivery settled up 0.2% at $1,271.80 a troy ounce.

Base metals prices were under pressure as the dollar hit three-month highs after sharply rallying in recent weeks.

The WSJ Dollar Index, which measures the dollar against a basket of 16 other currencies, was recently up 0.1% at 87.90. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies.

"I think [copper's drop] is mostly down to the dollar, plus some profit-taking at the end of a fairly steady week," said Robin Bhar, head of metals research at Société Générale.

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The rising dollar came after the European Central Bank said Thursday it would extend its bond-buying program, albeit at a reduced level, through September 2018. That confirmed investors' expectations that the central bank's move away from crisis-era stimulus policies would be gradual.

The euro responded to the ECB policy statement with its sharpest daily decline versus the dollar since the U.K.'s Brexit referendum in June 2016.

U.S. political developments also buoyed the dollar, ING said in a note. The House of Representatives adopted a budget Thursday, clearing a hurdle in the Trump administration's effort to rewrite the country's tax code.

Looking ahead, traders were keeping an eye on the Federal Open Market Committee, with the body due to meet next week in its final monthly meeting before a widely expected rate-increase announcement in December, ING said.

--Stephanie Yang contributed to this article.

Write to David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

October 27, 2017 15:03 ET (19:03 GMT)