(Updates with official prices)
LONDON, Aug 26 (Reuters) – Copper prices hit two-week highs on Tuesday after U.S. President Donald Trump’s announcement he would remove Federal Reserve Governor Lisa Cook boosted expectations of U.S. interest rate cuts next month and weakened the dollar.
A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies and drives demand and prices.
A flurry of buying after the New York open offset earlier losses triggered by companies selling copper in China.
Trump said in a letter he was firing Cook over alleged improprieties in obtaining mortgage loans. Analysts say that has reinforced investor concern about the independence of the U.S. central bank.
Benchmark copper on the London Metal Exchange was up 0.5% at $9,846 a metric ton at 1506 GMT from an earlier $9,862, the highest since August 13.
Copper drew support from disruption to supply in Chile, where the mining regulator Sernageomin has imposed additional requirements on Codelco for resuming operations in areas affected by a deadly collapse at its El Teniente copper mine.
Codelco, the world’s largest copper producer, has cut its copper forecast for the year as a result of the incident.
On the technical front, initial support for copper is at the 50-day moving average at $9,754 followed by the 21-day moving average at $9,731.
Elsewhere, traders expect zinc prices to be supported by sliding inventories in LME-approved warehouses, which at 65,525 have dropped 66% since the middle of April
. Cancelled warrants, or metal earmarked for delivery, indicate another 23,725 tons are due to leave the LME system.
Worries about supplies on the LME market have narrowed the discount for the cash zinc contract over the three-month forward
to around $4 a ton from levels above $40 in April.
Three-month zinc was down 0.2% at $2,812 a ton, aluminium rose 0.4% to $2,634, lead added 0.1% to $1,997, tin climbed 1.2% to $34,220 and nickel gained 1.2% to $15,285.
Metals markets are waiting for clues on demand prospects in the world’s biggest consumer of industrial metals, China, from surveys of purchasing managers in its manufacturing industry. (Reporting by Pratima Desai; Editing by Shreya Biswas, Barbara Lewis and Nick Zieminski)
