Weak dollar pushes copper prices to two-week high

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LONDON, Nov 4 (Reuters) – Copper prices climbed to a two-week high on Monday after the dollar fell on expectations of a U.S. interest rate cut and as markets awaited the outcome of this week’s U.S. presidential election.

Benchmark copper prices on the London Metal Exchange (LME) rose 1.1% to $9,679 a tonne at 1700 GMT, up from an earlier session high of $9,723.50 a tonne.

The Fed is expected to cut interest rates by 25 basis points at its Nov. 6-7 meeting, and analysts expect further cuts in the coming months.

This puts pressure on the dollar. When it falls, the dollar-denominated metal becomes cheaper for buyers holding other currencies and supports demand. Traders said Monday’s rise in copper prices was largely due to funds buying based on buy and sell signals from numerical models.

Physical traders also said market sentiment was upbeat, with focus on the U.S. election.

Polls show Kamala Harris and Donald Trump are neck-and-neck across the country and in the battleground states expected to decide the winner of the US election, although the intensity of the race means the winner could take several days It will take days to appear.

Manufacturing activity in top consumer China returned to growth in October as expansion in new orders led to a pickup in output growth, signaling an improvement in the sector.

Base metals markets are also hoping that a meeting of China’s top leaders on November 4-8 will decide on stimulus measures to stimulate economic growth.

“[China’s]increased fiscal spending will be highly welcomed,” StoneX analysts said. “However, details of the scale and areas of implementation remain uncertain and have disappointed markets so far this year.”

However, Yangshan premium weighed on market sentiment

The closely watched measure of demand for imported copper from China has fallen 30% to $48 a ton since climbing to $70 a ton in early October.

Among other metals, aluminum rose 0.7% to $2,618 a ton, zinc fell 1.3% to $3,029 a ton, lead fell 0.9% to $2,035 a ton, tin rose 1.1% to $32,090 a ton, and nickel rose 0.8% to $32,090 a ton. ton USD 16,070. (Reporting by Pratima Desai; Editing by Barbara Lewis, David Goodman and Mohammed Safi Shamsi)