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Comex Copper gains as PBoC cuts rates

FXStreet (Mumbai) - FXStreet (Barcelona) - Copper, on the Comex division of the New York Mercantile Exchange, shot up after the People’s Bank of China (PBoC) reduced the 1-year lending rate by 40 bps to 5.6% and 1-deposit rate by 25 bps to 2.75%. The PBoC also raised the deposit-rate ceiling to 1.2 times the benchmark.

Copper for December delivery traded 0.74% higher at USD 3.041/pound at the time of writing. The metal prices rose on optimism that a rate cut in China along with a possibility of more monetary stimulus in the Eurozone would generate growth and increase demand for the metal. Earlier today, the European Central Bank chief Mario Draghi also stated willingness to expand the stimulus program if the inflation continues to stay low in the Eurozone.

The rate cut in China comes a day after the HSBC survey data showed a slowdown in the Chinese manufacturing activity. Meanwhile, the private activity in the Eurozone also slowed down to multi-month lows in November. Thus, Copper prices were under pressure due to the concerns of a slowdown in China and Europe.

Copper Technical Levels

Copper has an immediate resistance located at 3.05, above which gains could be extended to 3.061 levels. Meanwhile, support is seen at 3.006 and 2.99 levels.

PBoC cuts interest rates, raises deposit-rate ceiling

The People’s Bank of China has announced a cut in interest rates effective 22 November. The central bank has cut the 1-year lending rate to 5.6 percent with the 1-year deposit rate cut to 2.75 percent.The PBoC also raised the deposit-rate ceiling to 1.2 times the benchmark.
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