ICE cotton futures dipped on Wednesday, after touching a three-week high in the previous session, as the dollar gained in strength after the US Federal Reserve raised interest rates for the first time this year. "(Cotton) prices started dropping from 2 pm (EST) after the dollar spiked up on the Fed's decision," said Gabriel Crivorot, analyst at Societe Generale in New York.
"The markets mostly expected the interest rate rise but were not really 100 percent sure," he added. March cotton contract on ICE Futures US settled down 0.57 cent, or 0.79 percent, at 71.47 cents per lb. It traded within a range of 71.31 and 72.3 cents a lb.
Total futures market volume fell by 9,820 to 15,231 lots. Data showed total open interest gained 1,829 to 252,739 contracts in the previous session. The dollar index was up 1 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.86 percent. The market awaited US exports sales data due on Thursday.