Reuters reported that London copper rose 0.5% buoyed by a softer dollar and expectations that the Federal Reserve will continue to supply liquidity to the market while zinc added 1.4% with an extra fillip from an LME margin cut.
Three month copper on the London Metal Exchange rose USD 43.50 to USD 9,142.50 per tonne by 0459 GMT having ended last week 1.1% lower. There was no trade on the Shanghai Futures Exchange due to a one day holiday in China.
Weak US data showed payrolls rose by 54,000 in May, the softest reading since September, and the countries jobless rate rose to 9.1% in May from 9% in April. But the softer numbers had a positive effect on metals, adding to speculative conviction that the Fed will continue to support liquidity in some form when its second bond purchasing program expires at the end of the month.
A trader in Perth said that copper gave up some of its early gains as the dollar recovered from its lows. The market is convinced the Fed will act once QE2 expires it won't be called quantitative easing and it might not be on the same scale as the previous programs but it will keep cheap cash readily available.
The US dollar slid to a fresh 1 month low against a basket of major currencies early in Asia on Monday, finding no support after the disappointing jobs data. Support also emerged after news Chile's fourth biggest copper mine, Codelco's El Teniente, was producing at less than half of capacity for a second day after most staff workers stayed home to avoid violence by striking contractors.
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