Investing.com - Copper futures regained strength during European morning hours on Wednesday, bouncing off a seven-month low as investors were looking ahead to the outcome of the Federal Reserve's policy meeting later in the day, as well as developments surrounding a bailout deal for Cyprus.
Weakness in the U.S. dollar also contributed to copper's strength. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 82.98.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.438 a pound during European morning trade, up 1% on the day.
New York-traded copper prices rose by as much as 1.2% earlier in the day to hit a session high of USD3.444 a pound.
New York-traded copper prices fell to USD.3389 a pound on Tuesday, the weakest level since August 21, as worries over a controversial bailout deal for Cyprus and concerns over a slowdown in demand from top consumer China weighed on the industrial metal.
Cyprus's President Nicos Anastasiades called an emergency meeting with political leaders to look at alternatives after parliament rejected the terms of the bailout agreement on Tuesday.
Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.
Market sentiment remained supported amid growing expectations that the European Union will renegotiate a deal with Cyprus to keep the country in the euro zone.
Market players now looked ahead to the outcome of the Federal Reserve's two-day policy meeting later in the day, as investors try to assess the central bank's attitude towards monetary stimulus.
Fed Chairman Ben Bernanke is to give a press conference after the release of the policy statement.
Elsewhere on the Comex, gold for April delivery shed 0.1% to trade at USD1,610.20 a troy ounce, while silver for May delivery added 0.3% to trade at USD28.92 a troy ounce.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
