Surged to multi-year highs against euro

Dollar strength weighs on commodity prices

GMT 09:35 2015 Saturday ,07 March

Arab Today, arab today Dollar strength weighs on commodity prices

Oil prices won support from unrest in Libya
London - Arab Today

Commodity prices came under pressure this week from a strong dollar which surged to multi-year highs against the euro.
The dollar rallied as the European Central Bank neared the launch of its massive stimulus package and after strong US jobs data raised the possibility of a hike soon to Federal Reserve interest rates.
A strong dollar makes commodities priced in the US unit more expensive for holders of rival currencies.
The European single currency on Friday sank to $1.0845 -- the lowest level since September 2003.
The ECB will meanwhile begin its 1.1-trillion-euro quantitative easing stimulus on Monday.
The US Labor Department said Friday that the US economy pumped out a stronger-than-expected 295,000 net new jobs in February.
"The dollar surged higher, having already gained substantially... from the European Central Bank's quantitative easing programme and weak eurozone GDP growth," said Alasdair Cavalla, economist at the Centre for Economics and Business Research.
OIL: Oil prices won support this week from unrest in Libya, helping to offset a surge in US crude inventories.
Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP that traders were "seeing a lot of upside potential, possibly based on tensions in the Middle East and Ukraine".
"Somehow, we are seeing investors looking away from the huge build in US (crude oil) inventories this week," he added.
Libya's National Oil Corporation declared force majeure Wednesday at 11 oil fields after attacks by Islamists.
The OPEC member country has been battling the rise of militias seeking control of its cities and oil wealth since the killing of dictator Moamer Kadhafi in 2011.
Unabated fighting has seen its output reduced from a high of almost 1.5 million barrels a day to 150,000, according to analysts.  
In Ukraine, investors are closely watching latest efforts to prop up a ceasefire in the country's eastern region, currently controlled by pro-Russia rebels.
The 10-month conflict in the country -- a key conduit for Russian energy exports to Europe -- is seen as Europe's worse since the war in the Balkans in the 1990s.
Data on Wednesday meanwhile showed a 10.3-million barrel surge in US crude reserves in the week to February 27, which dampened expectations of robust demand in the world's biggest economy.
The global oil market has lost about 50 percent of its value since June, weighed down by the global supply glut.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in April slid to $60.10 a barrel from $61.67 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to $49.83 a barrel from $48.94 a week earlier.
- Gold loses shine -
PRECIOUS METALS: Gold and sister metal silver dropped as the dollar shot higher.
"Precious metals came under some renewed selling pressure as the dollar resumed its ascent against most currencies," said Saxo Bank analyst Ole Hansen.
By Friday on the London Bullion Market, the price of gold fell to $1,175.75 an ounce from $1,214 a week earlier.
Silver slumped to $15.99 an ounce from $16.53.
On the London Platinum and Palladium Market, platinum slipped to $1,166 an ounce from $1,177.
Palladium rose to $823 from $808 an ounce.
BASE METALS: Base or industrial metals were mixed as investors reacted also to a growth outlook from commodities-hungry China.
China on Thursday lowered its 2015 economic growth target to "approximately seven percent", scaling down expectations in the face of "formidable" difficulties for the world's second-largest economy after its decades-long boom.
The figure announced by Premier Li Keqiang is the lowest since a similar goal in 2004 and comes after China's gross domestic product (GDP) expanded 7.4 percent in 2014, the slowest pace in 24 years. Last year's target was "about 7.5 percent".
The cut was widely expected by economists and reflects the reality of a multi-year slowdown in the Asian giant that has seen it come off regular annual double-digit expansions.
By Friday on the London Metal Exchange, copper for delivery in three months dropped to $5,747.50 a tonne from $5,862 a week earlier.
Three-month aluminium slipped to $1,795 a tonne from $1,810.
Three-month lead gained to $1,806 a tonne from $1,747.
Three-month tin grew to $18,090 a tonne from $17,910.
Three-month nickel increased to $14,310 a tonne from $14,110.
Three-month zinc retreated to $2,016 a tonne from $2,068.
- Coffee, sugar down -
COFFEE: Futures declined as rain fell in coffee's biggest producer Brazil.
By Friday on the ICE Futures US exchange, Arabica for delivery in May slid to 134.45 US cents a pound from 143.65 cents a week earlier.
On LIFFE, London's futures exchange, Robusta for May dropped to $1,866 a tonne from $1,886.
SUGAR: Prices hit multi-year lows with the dollar reaching a ten-year high against the Brazilian currency.
Prices hit a near six-year trough at $364.20 a tonne in London and an almost five-year low of 13.18 cents a pound in New York.
Brazil's real slid past three to the dollar for the first time in 10 years on Thursday, in the latest sign of weakness for South America's biggest economy.
By Friday on LIFFE, a tonne of white sugar for delivery in May grew to $373.80 from $370.10.
On ICE Futures US, unrefined sugar for May dropped to 13.50 US cents a pound from 13.86 US cents.
COCOA: Prices steadied after recent highs caused by the dry Harmattan wind across West Africa that blows away leaves and flowers which develop into cocoa fruits.
By Friday on LIFFE, cocoa for delivery in May rose to £2,037 a tonne compared with £2,011 a week earlier.
On ICE Futures, cocoa for May fell to $2,978 a tonne from $2,984 the previous week.
Source: AFP

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