Commodity prices came under pressure this week from a strong US dollar, which surged to multi-year highs against the euro.
The dollar rallied as the European Central Bank (ECB) neared the launch of its massive stimulus package and after strong US jobs data raised the possibility of a hike soon to US Federal Reserve interest rates.
A strong dollar makes commodities priced in the US unit more expensive for holders of rival currencies.
The euro on Friday sank to US$1.0845 — its lowest level since September 2003.
The ECB is to begin its 1.1 trillion euro (US$1.19 trillion) quantitative easing stimulus tomorrow.
The US Labor Department on Friday said that the US economy pumped out a stronger-than-expected 295,000 net new jobs last month.
“The dollar surged higher, having already gained substantially ... from the European Central Bank’s quantitative easing program and weak eurozone GDP growth,” Centre for Economics and Business Research economist Alasdair Cavalla said.
OIL: Oil prices won support this week from unrest in Libya, helping to offset a surge in US crude inventories.
Sydney-based CMC Markets chief market strategist Michael McCarthy said 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 on 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 former Liban leader Muammar Qaddafi 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 worst since the war in the Balkans in the 1990s.
Meanwhile, data on Wednesday showed a 10.3 million barrel surge in US crude reserves in the week to Feb. 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 last year, weighed down by the global supply glut.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April slid to US$60.10 a barrel from US$61.67 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to US$49.83 a barrel from US$48.94 a week earlier.
PRECIOUS METALS: Gold and silver lost their shine 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 US$1,175.75 an ounce from US$1,214 a week earlier.
Silver slumped to US$15.99 an ounce from US$16.53.
On the London Platinum and Palladium Market, platinum slipped to US$1,166 an ounce from US$1,177.
Palladium rose to US$823 from US$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 economic growth target for this year to “approximately 7 percent”, scaling down expectations in the face of “formidable” difficulties for the world’s second-largest economy after its decades-long boom.
By Friday on the London Metal Exchange, copper for delivery in three months dropped to US$5,747.50 a tonne from US$5,862 a week earlier.
Three-month aluminum slipped to US$1,795 a tonne from US$1,810.
Three-month lead gained to US$1,806 a tonne from US$1,747.
Three-month tin grew to US$18,090 a tonne from US$17,910.
Three-month nickel increased to US$14,310 a tonne from US$14,110.
Three-month zinc retreated to US$2,016 a tonne from US$2,068.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS