Metals remained trading rangebound on the back of worries of US fiscal cliff. Surprisingly the moves are fixed on any concrete steps by US and Europe to solve their individual problems even as Dollar slipped to a seven week low versus the Euro.
US currency declines is generally quite positive for the metals as it makes them cheaper but due to economic crisis looming higher in US and Europe that impact was negated. Dollar was trading at 1.3106 against the Euro, further down by 13 pips on Wednesday. This level was last seen on 17 October 2012.
Copper seemed to be the sole beneficiary of the fall in US dollar. The metal used in electricity and construction remained moving forward amid recovery in Chinese manufacturing. China consumes 40% of the total copper produced in the world.
LME three month Copper forwards were at six week highs on Wednesday, trading at $ 8042 per tonne, compared to $ 8010 per tonne on Tuesday. MCX Copper moved in a range of Rs 448 and 443 on Tuesday and closed at Rs 445.7 per kg, up 0.28%.
Battery material lead was unchanged at $ 2237 per tonne on Wednesday. The metal is expected to show some strength in international markets as the Chinese car sales markets offer opportunities for battery manufacturers though demand is affected by seasonality in winters as UPS and invertors sales come down.
Indian car makers remained suffering from slower demand even in peak Diwali season on account of higher interest rates, inflation and cost of petroleum products. MCX Lead for December expiry closed at Rs 122 per kg, down 0.6% on Wednesday.
Mining major country Australia slashed its interest rates by 0.25% to 3% in order to support manufacturing. Australian mining was getting severely hit by the rise of Australian Dollar and declining commodity prices.
Australian Dollar has increased to 1.0473 against the USD, since hitting a low of 0.97 in June this year. Higher Australian currency is affecting the mining industry of the country as the mining costs are improving.
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