Stronger greenback pulls copper down

London: Copper fell in London, ending a four-session winning streak, on a stronger dollar and concern about the pace of demand after a drop in bookings to remove metal from warehouses.

The US Dollar Index, a six-currency gauge of the greenback's strength, rose as much as 0.4 per cent. Gains by the US currency make dollar-priced metals more expensive for holders of other monies. Cancelled warrants, as the bookings are known, slid 14 per cent after more than doubling in the prior five sessions.

"There's still too much metal around and too much metal being produced against the anticipated level of demand," Charles Kernot, an analyst at Evolution Securities Ltd. in London, said.

Copper for three-month delivery fell $60, or 0.8 per cent, to $7,520 a metric tonne at 9:42 am on the London Metal Exchange. The contract Wednesday touched $7,634, the highest intraday price since January 11. Copper for May delivery dropped 0.6 per cent to $3.414 a pound on the New York Mercantile Exchange's Comex unit.

LME prices may fall below $6,000 a tonne at the end of the second quarter as manufacturers try to reduce inventories before the Northern Hemisphere's summer, Kernot said.

Gains

The dollar index has advanced 3 per cent this year as concern about Greece's ability to narrow its budget deficit reduced demand for euro-denominated assets. The country yesterday unveiled 4.8 billion euros (Dh17.65 billion) of additional deficit cuts.

Spain's budget gap probably will remain above 5 per cent through 2013, Standard & Poor's said on February 26. Portugal's public-sector workers are striking today to protest a wage freeze that's part of the government's efforts to convince the European Union and investors it can tame its budget deficit.

"The problems in Greece, Spain and Portugal tend to indicate that we are not going to see any big uptick as far as European demand is concerned," Kernot said.