Copper fell over 5 percent today as the dollar rose against the euro, diminishing demand for commodities used to compensate for inflation.
The dollar rose to a five week high on speculation that the U.S. Federal Reserve will stop cutting more interest rates. It climbed to $1.5462 per euro but had jumped as much as 1.2 percent earlier. The Dollar Index, a basket which measures six currencies including the yen and U.K. pound against the dollar, rose as much as 1.1 percent.
Copper futures for delivery in July fell 21 cents or 5.38 percent to $3.6945 a pound in the Comex division of the New York Mercantile Exchange today.
The Federal Reserve cut interest rates by a quarter of a percentage point leaving them at 2 percent. The Fed has cut borrowing costs since September in order to bolster the U.S. economy.
Although the majority of analysts observed that prices went down today due to a stronger dollar, supply concerns limited more losses as the strike in Chile's state owned Codelco which is significantly affecting the production of copper continues. Contract workers kept three mines closed, eroding output of the red metal.
On Thursday London Metal Exchange warehouse copper was down by 450 metric tons on Thursday at 110,075 metric tons.
Copper futures in the London Metal Exchange rose $9.5 or 0.11 percent to $8,647.50 a share on Thursday.