Copper futures failed to hold on to their highs from earlier in the day as the US dollar underwent a modest rally.
Gains for the red metal had been prompted by expectations of stimulus measures in China and the US, while Brazil’s announcement of $66 billion in stimulus earlier in the week was a welcome addition. Chinese premier Wen Jiabao said that a cut in the reserve ratio requirement for Chinese banks might be needed soon to help stimulate the economy. US data of late has been better, but Wednesday’s lacklustre CPI data means that the Fed still has room for more stimulus without putting too much pressure on American shoppers.
Like most markets at present, copper is beset by low volumes and small price movements, but the possibility of central bank action in September means that the outlook remains broadly positive.