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LONDON, Mar 9 (Bloomberg): Copper was little changed near a record high in London after the dollar dropped against the euro, making the metal and other commodities cheaper for holders of the European currency.
The U.S. currency fell to a two-month low versus the euro as analysts at Barclays Capital and Credit Suisse First Boston forecast further gains based on trading patterns.
``U.S. dollar weakness again drove the rise,'' said David Thurtell, a commodity strategist in Sydney at Commonwealth Bank of Australia in a note distributed today.
Copper for delivery in three months on the London Metal Exchange declined $2, or 0.1 percent, to $3,268 a metric ton as of 8:18 a.m. local time. The metal, used in wiring and plumbing, yesterday traded as high as $3,300 a ton, the most since copper started trading on the LME in its current format in 1986.
The dollar dropped 0.3 percent to $1.3373 against the euro, according to EBS, an electronic currency-dealing system. The U.S. currency fell yesterday to $1.2263, the lowest since Jan. 4.
A key to the euro's rally was a break above the $1.3280 level, which was last month's high and also the euro's high since early January, several traders and analysts said.
``We punched right through it,'' said Jordan Kotick, global head of technical analysis at Barclays in New York. ``It confirmed the ongoing bull market for the euro; we're ultimately looking for a retest of $1.35-$1.37.''
``A weaker dollar prompted fund buying,'' said Robin Bhar, a Standard Bank analyst in London, in a report yesterday. Metals are ``receiving a great deal of attention from investors.''
Speculative investors such as hedge funds have amassed their biggest copper holdings since November 2003. Bets that prices will rise, or net long positions, outnumbered short positions by 33,226 contracts on the Comex division of the New York Mercantile Exchange in the week ended March 1, Washington-based U.S. Commodity Futures Trading Commission said March 4.
Copper for May delivery rose on the Shanghai Futures Exchange rose 270 yuan to 31,120 yuan a ton.
Aluminum on the LME dropped $5 to $1,985 a ton, nickel slipped $30 to $16,200 and zinc declined $2 to $1,416. Lead gained $3 to $980 and tin was unchanged $8,450.
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