Shanghai copper dropped on Friday as risks from trade tensions remained a focus for investors, though a weaker U.S. dollar amid rising prospects of another Fed rate cut limited losses.

The most-traded copper contract on the Shanghai Futures Exchange dropped 0.42% to trade at 84,630 yuan ($11,881.56) per metric ton as of 0330 GMT, set to end the week down by 2.42%.

The benchmark three-month copper on the London Metal Exchange was down 0.82% to $10,560 a ton, set for a 0.46% weekly gain.

Copper shed gains amid cautious sentiment as market participants continued to focus closely on trade developments between China and the United as a high-stakes meeting between both countries nears.

China on Thursday blamed the United States for stocking a global panic over its rare earth export control.

The accusation came as a response to U.S. officials’ comments Wednesday saying China’s expansion of its rare earth export regime is a threat to global supply chains, threatening to decouple and urging China to change course.

The U.S. side “seriously distorted” China’s measures and stirred unnecessary misunderstanding and panic deliberately, Beijing said.

Copper, however, found some support to limit its decline from a weaker U.S. dollar with high hopes for another interest rate cut by the Federal Reserve.

A soft dollar helps to make commodities traded with the greenback cheaper for investors using other currencies.

Fed Governor Christopher Waller said on Thursday he was on board for another rate cut later this month, citing weak labour market data, while his colleague Stephen Miran called for a more aggressive rate cut path.

Elsewhere among SHFE base metals, zinc dipped 0.48%, lead was down 0.26%, tin climbed 0.52%, while aluminium and nickel were little changed.

Among other LME metals, zinc dropped 0.72%, nickel lost 0.41%, tin decline 0.23%, lead gained 0.28%, while aluminium was little changed.
Source: Reuters