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$2.9941 - Copper Futures Rise After Euro Zone Output Data

NEW YORK, Jun 14, 2010 (Dow Jones Commodities News via Comtex) --

By Matt Whittaker
Of DOW JONES NEWSWIRES

A stronger euro on the back of surprisingly robust European industrial production is boosting copper futures very close to the key psychological $3 level.

Copper for July delivery was recently up 7.5 cents, or 2.6%, at $2.9790 a pound on the Comex division of the New York Mercantile Exchange.

"The base metals have looked to the dollar for direction, with a recovery in the euro...against the dollar seeing the base metals rally across the board," said Standard Bank analyst Leon Westgate.

Copper often responds positively to gains in economic confidence because it is used throughout the globe in the manufacture of appliances, electronics, automobiles and piping for buildings.

It also tends to gain when the dollar falls because that makes dollar-denominated copper less expensive for buyers using other currencies, which can bump up demand.

In recent activity, the ICE Futures U.S. Dollar Index was down 1% and the euro was up 0.9% on news that industrial production in the 16 countries that use the euro surged in April.

The measure rose 0.8% from March and gained 9.5% from a year earlier, the sharpest year-on-year increase since records began in January 1990. Economists had forecast a 0.5% monthly increase and an 8.7% year-on-year gain.

The figures help to allay some of the fears about European debt that had sent copper prices more than 20% lower since early April.

Participants have been worried that the debt problems--particularly in Greece, Spain, Portugal and Hungary--could spread and derail the worldwide economic recovery, hitting demand for the red metal.

In another indication of demand, inventories of copper stored in London Metal Exchange warehouses fell 1,825 metric tons Monday, leaving them at 463,175. The most recent Comex inventory data, released late Friday afternoon, were unchanged at 102,110 short tons.

-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; [e-mail]

(END) Dow Jones Newswires

06-14-10 0918ET

://news.tradingcharts.com/futures/9/1/141062019.html