London Metal Exchange (LME) copper firmed 1.3 percent by Friday's kerb close as the dollar fell to fresh lows against the euro, traders said. "Currencies and copper are leading the complex. We saw more fund interest as the euro broke $1.29 and now there is good two-way trade in copper around $2,950," one LME trader said.
The euro reached a new peak around $1.2950 as an undercurrent of negative dollar sentiment driven by the US current account and budget deficits weighed on the greenback.
Copper closed the week at $2,953 a tonne, up from $2,915 at Thursday's close.
"The market thinks four more years of Bush means bigger deficits and a weaker dollar. Until there is a bit more stability in the dollar-euro rate the sell-off in metals, which I think is overdue, won't happen," a second trader said.
As well as support from the dollar, market watchers said copper's technical picture was positive.
"The market is currently looking reasonably well supported at $2,825 and again toward $2,750," Triland Metals said in a weekly report.
"While regular dips should remain a feature, a bounce back toward...the psychological $3,000 level looks likely in coming sessions before selling pressure emerges once again," the report said.
Aluminium was at $1,828, up $16.
"Unless values can establish themselves back underneath $1,700 an extension back toward and then beyond $1,885/90 should develop in coming sessions - targeting the psychological $2,000 level next," Triland said.
Lead climbed $10 to $925 and zinc rose to $1,100 from 1,080. Nickel edged $75 lower to $14,400, while tin was up $150 at $9,150 on consumer buying.
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