Copper price stays firmer on stimulus hopes, softer DXY

Copper price prints three-day uptrend, extends bounce off six-week low.
Cautious optimism weighs on the US dollar, underpins hopes of recovery in metal’s market.
China, Europe and the UK are up for more stimulus to avoid recession fears.

Anil Panchal FXStreet

Copper prices extend the latest recovery moves, picking up bids to 3.4578 during the three-day uptrend ahead of Tuesday’s European session.

Elsewhere, the three-month copper on the London Metal Exchange (LME) rose 0.3% to $7,678 a tonne by 02:59 GMT and the most-traded October copper contract on the Shanghai Futures Exchange (SFE) advanced 1.3% to 60,850 yuan ($8,773.45) a tonne, said Reuters.

In doing so, the red metal cheers the market’s firmer sentiment and expectations of more stimulus, especially from China. Also keeping the metal buyers hopeful is the softer performance of the US Dollar Index (DXY) after it refreshed the 20-year high the previous day.

While portraying the mood, the US 10-year Treasury yields rise 2.5 basis points (bps) to 3.21% whereas the S&P 500 Futures extend the week-start recovery to 3,943, up 0.50% intraday by the press time. Further, the market’s consolidation also allowed the DXY to retreat from the 20-year high to 109.37, before a recent rebound to 109.62.

Chatters surrounding more aid packages to propel economic recovery seem to have favored the optimists during the full markets. That said, the incoming UK PM Liz Truss is up for a £130 billion energy plan while the People’s Bank of China (PBOC) cuts the Reserve Requirement Ratio (RRR). Further, politicians from Germany/Eurozone are all in to battle with the recession woes with a heavy push to defend energy companies and stock for winters.

Tighter supply in China and a fall in the metal’s output in Peru also favor the prices. “The premium of LME cash copper over the three-month contract rose to $77.50 a tonne on Monday, the highest since December 2021, signaling tightening supply of immediately available material on the LME warehouses,” said Reuters. The news also added that in Peru, the world's second-largest copper producer, copper output in July fell 6.6% year-over-year to 195,234 tonnes after two of the country's largest mines underperformed.

Technical analysis

A clear downside break of 3.3780 becomes necessary for the copper future bears at the COMEX.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD drops to multi-month troughs near 1.3140

GBP/USD adds to Tuesday’s pullback and recedes to the lowest level since November 2025 near 1.3140. A firmer Greenback and continued political turmoil in the UK are keeping Cable under persistent pressure, with little sign of a meaningful recovery.

EUR/USD bounces off YTD lows around 1.1320

EUR/USD extends its decline on Wednesday, falling to fresh yearly lows near 1.1320. The pair remains on the defensive as the US Dollar continues to draw support from hawkish Fed expectations and uncertainty over the outcome of US-Iran peace negotiations.

Gold trims losses, back above $4,000

Gold retreats further and breaches below the key $4,000 mark per troy ounce for the first time since November 2025 on Wednesday. Higher-for-longer Fed expectations and a broadly firmer US Dollar continue to weigh on the precious metal, while uncertainty surrounding a potential US-Iran peace agreement has done little to revive demand for the safe haven space.

Crypto Today: Bitcoin, Ethereum, XRP trade under pressure as September Fed rate-hike odds increase

Bitcoin is trading between $62,000 and $63,000 at the time of writing on Wednesday, weighed down by headwinds stemming from macroeconomic uncertainty and geopolitical tensions in the Middle East.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally

Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.