November 7, 2018 / 7:41 AM / a year ago

METALS-London copper rises as dollar drops on Democrat's gains in U.S. elections

 (Updates Shanghai closing prices, global markets and U.S.
    By Mai Nguyen
    SINGAPORE, Nov 7 (Reuters) - London copper rebounded from a
two-day losing streak on Wednesday as the dollar declined after
the Democrats won control of a house in Congress during the U.S.
mid-term elections, with the weaker currency potentially
boosting demand for the metal. 
    For dollar-denominated copper contracts on the London Metal
Exchange (LME), the weaker greenback could spur purchases by
buyers paying in other currencies. 
    "One of the headwinds for base metals has been the dollar
being strong and that's partly the result of the extra stimulus
the Trump administration pumped into the economy and rising
interest rates," said Guy Wolf, global head of market analytics
at Marex Spectron.
    Trump and his fellow Republicans expanded their majority in
the U.S. Senate, but his party lost their majority in the House
of Representatives. The results are a setback for Trump after a
campaign that became a referendum on his leadership.
    "If these results are perceived to weaken the ability of the
Trump administration ... it's fair to think there's scope for
the U.S. dollar to reverse some of the moves over the last
couple of years," Wolf said.
    * COPPER: Three-month copper on the LME         edged up 0.1
percent to $6,152 a tonne, as of 0713 GMT, and the most-traded
copper contract on the Shanghai Futures Exchange          ended
0.4 percent down to 49,470 yuan ($7,139.35) a tonne.
    * EQUITIES, DOLLAR: Wall Street stock futures and Asian
shares lost steam on Wednesday, while the dollar weakened versus
the euro and sterling after Democrats won control of the U.S.
House of Representatives.                   
    * FED MEETING: Investors were also waiting for the outcome
of this week's policy meeting by the U.S. Federal Reserve, with
some analysts not expecting another rate hike this month but
looking for clues on future policy tightening.
    * OTHER METALS: LME aluminium        , lead         and tin
        all edged higher, while in Shanghai, lead         ,
nickel         , and zinc          ended lower. Shanghai
aluminium          prices gained. 
    * FUNDAMENTALS: Analysts have said the U.S.-China trade war
has capped gains of copper prices despite supportive fundamental
factors. "There's a disconnect between the micro fundamentals
and the macro sentiment at the moment in base metals," Wolf at
Marex Spectron said.

    Three month LME copper                  
    Most active ShFE copper                  
    Three month LME aluminium               
    Most active ShFE aluminium               
    Three month LME zinc                    
    Most active ShFE zinc                    
    Three month LME lead                    
    Most active ShFE lead                    
    Three month LME nickel                 
    Most active ShFE nickel                   
    Three month LME tin                     
    Most active ShFE tin                             

($1 = 6.9292 Chinese yuan)

 (Reporting by Mai Nguyen; Editing by Christian Schmollinger)
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