Investing.com - Copper futures rallied to a five-week high on Thursday, as appetite for riskier assets was boosted after European leaders unveiled fresh measures to tackle the region’s two-year old debt crisis.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.607 a pound during European morning trade, surging 3.35%.
It earlier rose by as much as 3.4% to trade at USD3.608 a pound, the highest price since Sept 22.
French President Nicolas Sarkozy said early Thursday that European leaders reached an agreement with banks to take a 50% writedown on the face value of their Greek debt holdings. The writedown will reduce Greece’s debt burden from 160% of GDP to a more sustainable 120% by 2020.
Additionally, euro zone leaders agreed to enhance the size of the European Financial Stability Facility, the region’s bailout fund, to EUR1 trillion, while a plan to recapitalize banks was also agreed upon.
Risk sentiment strengthened following the announcement, as investors flocked to riskier assets, such as commodities and stocks, and shed traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was down 0.8% to trade at 75.83, the lowest since September 8.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, copper futures found further support after an ongoing strike at Freeport McMoran Copper & Gold’s Grasberg mine in eastern Indonesia was extended to November 15.
The company said earlier in the week that it expects to lose nearly 100 million pounds of copper output this year due to the strike after production at the Grasberg mine fell 15% in the first nine months of the year from the same period a year earlier.
Grasberg is one of the world's largest copper mines. In 2010, Freeport sold 1.2 billion pounds of copper from Grasberg.
Elsewhere on the Comex, gold for December delivery slumped 0.75% to trade at USD1,710.55 a troy ounce, while silver for December delivery eased down 0.1% to trade at USD33.28 a troy ounce.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.607 a pound during European morning trade, surging 3.35%.
It earlier rose by as much as 3.4% to trade at USD3.608 a pound, the highest price since Sept 22.
French President Nicolas Sarkozy said early Thursday that European leaders reached an agreement with banks to take a 50% writedown on the face value of their Greek debt holdings. The writedown will reduce Greece’s debt burden from 160% of GDP to a more sustainable 120% by 2020.
Additionally, euro zone leaders agreed to enhance the size of the European Financial Stability Facility, the region’s bailout fund, to EUR1 trillion, while a plan to recapitalize banks was also agreed upon.
Risk sentiment strengthened following the announcement, as investors flocked to riskier assets, such as commodities and stocks, and shed traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was down 0.8% to trade at 75.83, the lowest since September 8.
A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, copper futures found further support after an ongoing strike at Freeport McMoran Copper & Gold’s Grasberg mine in eastern Indonesia was extended to November 15.
The company said earlier in the week that it expects to lose nearly 100 million pounds of copper output this year due to the strike after production at the Grasberg mine fell 15% in the first nine months of the year from the same period a year earlier.
Grasberg is one of the world's largest copper mines. In 2010, Freeport sold 1.2 billion pounds of copper from Grasberg.
Elsewhere on the Comex, gold for December delivery slumped 0.75% to trade at USD1,710.55 a troy ounce, while silver for December delivery eased down 0.1% to trade at USD33.28 a troy ounce.