The conventional wisdom used to be that a lower $US lifts commodity prices. The 0.5% interest rate cut there would entirely explain recent stronger copper prices.
My search on this throws up many articles claiming this is no longer applies, seemingly as the US is now a major oil/gas exporter.
They offer a fun thesis, yet it remains true that a lower US dollar raises the price received by foreign commodity producers, all else being equal.
The interest rate cut will in time prompt increased economic activity and copper consumption.
Copper prices were over $US5lb in May. Today's price of $US4.40lb can be characterised as 'range trading'.
Talk to me again when copper prices are $US5.12lb or better. That won't be far off.
Ash
A1M Price at posting:
33.0¢ Sentiment: Buy Disclosure: Held
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