Shanghai Futures Exchange copper slid 1.2 percent to 40,620 yuan ($6,378) a tonne on Monday amid persistent concerns about the pace of China's growth, while a soft dollar cushioned losses as traders looked ahead to this week's pivotal Federal Reserve monetary policy decision. "I do see a Fed hike, I do see the dollar strengthening and I think in that world it's going to be tough for the metals to do really well," said analyst Dominic Schnider of UBS Wealth Management in Hong Kong.
The dollar held at its weakest since late August against a basket of currencies on Monday, adding support to metals that are facing headwinds from prospects of slowing demand in China, the world's top consumer of metals. The Fed holds its two-day meeting on September 16-17 and markets are still guessing whether the central bank will hike rates then, or opt for December or early next year.
Growth in China's investment and factory output missed forecasts in August, pointing to a further cooling in the world's second-largest economy that will likely prompt the government to roll out more support measures. "The Chinese numbers released at the weekend showed a lot of promise but are yet to translate into firmer demand - no reason to get euphoric. This week should not be as supportive for metals," Schnider added.
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