Copper Throws Markets a Wrench, Buck Down

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Copper Throws Markets a Wrench, Buck Down

AUGUST 12, 2021

The U.S. Dollar is trading in mostly tight ranges with some movement in favor of the commodity-based currencies as copper prices fluctuate wildly.

Overview

A strike in Chile, a major global supplier of the common industrial metal, is threatening to disrupt all kinds of contracts as well as the future of supplies while the world is trying to build up a recovery. While the U.S. and China’s growth is back to pre-pandemic levels, the rest of the globe is in need of a smoother ride, and this clearly brings on a sudden challenge. Additionally, global investors are digesting news of a Chinese plan for stricter business regulation.

This morning’s release of Producer Price Index figures for July impressed with higher than estimated readings as the month-over-month pace for the month was 0.9% over the 0.5% estimate, even when excluding volatile food and energy costs. Initial and Continuing Jobless Claims came in right as expected, only slightly lower than prior numbers. Overall, we shall see where this commodity-related day takes us, could be a mixed day for the buck.

What to Watch Today…

  • No major economic events are scheduled for today

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Q2 2021 Bloomberg Win

EUR   

The Euro fell to its lowest point against the greenback since March 31st as investors worry that the economy is not growing fast and could slow down because of Delta and restrictions. While things remain mostly calm, each nation is assessing its border openness and whether to shut down and exercise curfews. Infections have risen in every country basically and we shall see if numbers start dwindling and establishing Euro weakness for the rest of the month.

GBP  

Sterling was unmoved by the release of Gross Domestic Product figures for Q2 that fell right in line with expectations of a quarter-on-quarter 4.8% pace. June saw an increase in GDP better than expected at 1.0% over the 0.8% estimate. Industrial Production and Construction Output hoped for better June figures, but in fact, contracted when expansion was the actual forecast. We will keep eyes on U.K. post-Brexit troubles as these have been a drag on the economic recovery and may remain an issue for the rest of the year.

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