BEIJING- Copper prices were little changed on Wednesday amid cautious sentiment ahead of the US Federal Reserve’s interest rate decision, while being underpinned by firm market fundamentals.
Three-month copper on the London Metal Exchange was unmoved at $8,759.50 a ton, having recovered this week from a two-month low hit last Wednesday due to a large sell-off over a banking crisis, as regulators moved to rescue First Republic Bank and European lender Credit Suisse.
The Fed began a two-day meeting from Tuesday, and investors are divided about whether the central bank will raise interest rates by 25 basis points on Wednesday or place a pause on hikes for the month.
The dollar was pinned near five-week lows on Wednesday, making it more attractive for non-dollar holders to buy the greenback-priced commodity.
The most-traded May copper contract on the Shanghai Futures Exchange SCFcv1 inched up 0.7 percent to 67,850 yuan ($9,853.75) a ton.
Despite macro uncertainty, markets were also aided by firm fundamentals as demand from top consumer China improved, against the backdrop of constrained supply.
One signal of a brightening picture in China is that the 1-month price on SHFE has moved back above the equivalent LME price, metal derivatives broker AMT said in a note. – Reuters
