The most traded April copper contract on the Shanghai Futures Exchange sagged 1.3 percent to 39,690 yuan ($6,355) a tonne on Wednesday, propped up by a weaker dollar after a drop in US capital goods orders sparked talk the Federal Reserve might push back its timeline for raising interest rates. Copper prices have been walloped by persistent signs of weakening growth in top user China as well as sickly European demand and a surge in the dollar.
Analyst Dominic Schnider at UBS Wealth Management in Hong Kong said the Fed was unlikely to delay an interest rate rise, which meant metals faced the risk of a dollar revival in the near term. "The lower oil price is a boost to consumers, so there is no reason for them to come on the dovish side. They will stick to their view. You should see renewed strength of the dollar, which should help copper test the $5,000 level in three months," he said.
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