Metal Investments

US Dollar - Which Direction?

07. May 2008

Wednesday, 11:40am GMT


  • The dollar firmed a touch overnight after Fed rate setters expressed concern about rising inflation, boosting expectations the central bank will pause in its cycle of interest rate cuts. The dollar remains an important factor in driving the commodities price. Comments by Mr Hoenig, president of the Federal Reserve Bank of Kansas City, that the Fed might need to raise interest rates to curb inflationary pressures, should provide further support to the dollar.

  • LME base metals are mixed this morning. Shanghai copper prices fell today due to uncertainty over Chinese consumption and end of a strike by Chilean subcontractor workers. The second quarter will be a key period (for a possible demand increase. LME Copper stocks are down by 625 tons to 109,025 tons.

  • Aluminium is at $2932 with LME stocks up by 2950 tons to 1,039,275 tons.

  • Gold is at $869.40 steady in early trade as rising inflation fears amid near-record oil prices were offset by a strengthening in the U.S. dollar, which dented the precious metal's appeal as an alternative investment.

  • The FTSE 100 index is up this morning by 36 points to 6251 as firmer crude prices propelled oil shares higher, offsetting weaker banks and miners.

    LME Metals 3 Month Prices, 11:50pm GMT

    Bid Offer Change *
    Copper $8460 $8470 - $68
    Aluminium $2938 $2940 - $26
    Lead $2495 $2500 - $75
    Zinc $2246 $2250 - $30
    Nickel $28405 $28424 - $251
    Tin $24050 $24250 + $150

    * Change from previous day's close