LONDON: Copper prices rose on Monday as a stronger Chinese currency, a weaker dollar and buoyant loan data from top consumer China fuelled purchases by traders that use algorithms to generate buy and sell signals.
Benchmark copper on the London Metal Exchange (LME) traded 2.0% higher at $8,410.5 a metric ton as of 1613 GMT. Prices of the metal used widely in the power and construction industries touched a three-week low of $8,213 a tonne on Friday.
A weaker US currency makes dollar-denominated commodities cheaper for holders of other currencies, which could boost demand and prices. This relationship is used by algorithmic traders known as high frequency traders (HFTs).
China’s central bank helped to strengthen the yuan against the dollar by setting the daily midpoint guidance with the biggest bias on record, signalling increasing discomfort with the currency’s recent weakness.
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