Copper futures were steady in Asia on Thursday, reluctant to challenge the 6-week high reached last week but supported by a struggling US dollar and stocks near a 14-1/2-year low. The market took little notice of stronger-than-expected US manufacturing data, usually a bullish factor for metals, and instead remained fixated on the dollar, which sank to another record low against the euro.
"Everyone is focusing on the currency market. The weak dollar will support copper, but with the threat of intervention there's only limited room for movement," a futures trader in Japan said.
Three-month copper on the London Metal Exchange was trading at $3,115/$3,120 a tonne. The metal has risen more than 40 percent in value during the last year, hitting a near 16-year peak of $3,175 on October 11.
It closed at $3,115 in London on Wednesday. The euro traded near a record high of $1.3370 in Tokyo trade on Thursday, and the Japanese yen was around 102.30 against the US currency, near a 4-1/2-year peak.
The market is watching for central bank intervention after Japan's top currency policy official, Hiroshi Watanabe, gave his clearest warning yet of possible dollar-buying action.
A weak dollar encourages buying of copper and other metals as an alternative investment tool.
"People will try to sell on any rally in copper but I don't think it will collapse, because of the tight market," the Japanese trader said. Copper has tried and failed several times this week to break through last week's high of $3,143 a tonne.
But investors have also been quick to buy on any dips in the market, supporting the three-month price above $3,030.
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