Copper price falls after US rate rise

LONDON: Copper fell on Thursday for a fourth day after the Federal Reserve lifted US interest rates and sounded a more hawkish than expected note on future policy, boosting the dollar and weighing on assets priced in the US currency.

The dollar strengthened as expectations of another US rate increase this year were kept alive by a policy statement that indicated huge emergency funds pumped into the economy since 2009 could be trimmed.

"The recovery in copper prices from the early May lows to the recent highs was helped by the weakening dollar," Julius Baer analyst Carsten Menke said. "We see the dollar strengthening in the second half of this year. That should cause some headwinds for the metals markets."

Below-forecast US inflation and retail sales data on Wednesday, coming hot on the heels of reports showing Chinese growth may lose momentum, had already reinforced concerns about the outlook for raw materials demand.

Overall, the outlook for Chinese growth will be the leading driver for copper prices, Menke said.

"The data we've seen this week in terms of fixed asset investment, infrastructure and also property reflects the market's belief that we're about to see a slowdown from that side," he said. "That is something the copper market is (reflecting) currently.