Copper edges higher on speculation of Dovish monetary policy shift

March 27, 2023 (MLN): Copper prices edged higher amidst speculation that central banks, including the Federal Reserve, may adopt a more dovish stance on monetary policy.

ANZ Research is of the view that investors are anticipating a pause in plans for interest rate increases or a shift toward more accommodative monetary policy, as concerns of a credit crunch continue to dominate market sentiment.

If these expectations come to fruition, it is likely that the US dollar will weaken further, which could potentially boost investor demand for base metals.

According to ANZ analysts, this could lead to an increased appetite for copper, one of the most widely-used base metals in manufacturing and construction.

The three-month LME copper contract was up 0.1% to $8,933.50 per ton, with market participants keeping a close eye on any potential changes in central bank policy that could impact the direction of copper prices.

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