US copper futures closed at their lowest in three weeks on Thursday amid fund selling sparked by end of the quarter book squaring and a firmer US dollar against the euro, traders said. "The dollar turned higher toward the end of the day and I think that weighed a little on copper today, but other than that, I really didn't see anything out there that was fundamentally bearish that would pull us down," said one broker, adding that on Friday's shortened trading session may have prompted the selling as well.
The New York Mercantile Exchange's copper market will close at 12:05 EDT on Friday, and will be closed on Monday for the Independence Day holiday.
Business will resume on Tuesday. Copper for September delivery sank 5.20 cents to $1.51 a lb. on the New York Mercantile Exchange's Comex division, its cheapest close since June 15, after trading in a wide $1.5050 to $1.5740 trading band.
Spot July copper lost 4.40 cents at $1.5535 a lb., its weakest settlement since June 1 on a spot continuation basis. Comex estimated final copper volume reached 17,000 lots, compared with Wednesday's official count at 13,598 lots.
Analysts noted there was some technical selling involved in the market's slide, mainly on the London Metal Exchange, which ignited the selling here in New York.
"We went through $3,350 and $3,300 on the three-month contract and I think that gave some downside strength to it and pushed us through $1.5350, which was a prior low in September," said one.
The dollar was firmer against other currencies on Thursday and received an additional boost against the euro after the Federal Reserve raised interest rates by 25 basis points as expected to 3.25 percent.
The euro initially dipped to $1.2090 shortly before the Fed announcement and was little changed from levels late on Wednesday in New York.
Looking toward on Friday, analysts believed the volumes should thin out before the long holiday weekend. "That doesn't necessarily mean the market will be quiet.
I look for a thin and choppy session tomorrow," said one. On the fundamental front, record low global inventory levels and production disruptions in Chile, the United States and Zambia should continue to offer support.
"I wouldn't think people would start to short this market, given the stock situations and the labour unrest," said a trader. London Metal Exchange copper warehouse stocks dropped 4.7 percent or 1,450 tonnes to 29,525 tonnes.
Comex inventories rose 49 short tons to 15,319 tons on Wednesday's report. London Metal Exchange metals fell sharply as speculation triggered sell-stop orders in some contracts.
Three-month copper fell $39 to end at $3,319 from Wednesday's kerb close.