Commodity prices came under pressure this week from a strong US dollar, which surged to multi-year highs against the euro.
The dollar rallied as the European Central Bank (ECB) neared the launch of its massive stimulus package and after strong US jobs data raised the possibility of a hike soon to US Federal Reserve interest rates.
A strong dollar makes commodities priced in the US unit more expensive for holders of rival currencies.
The euro on Friday sank to US$1.0845 — its lowest level since September 2003.
The ECB is to begin its 1.1 trillion euro (US$1.19 trillion) quantitative easing stimulus tomorrow.
The US Labor Department on Friday said that the US economy pumped out a stronger-than-expected 295,000 net new jobs last month.
“The dollar surged higher, having already gained substantially ... from the European Central Bank’s quantitative easing program and weak eurozone GDP growth,” Centre for Economics and Business Research economist Alasdair Cavalla said.
OIL: Oil prices won support this week from unrest in Libya, helping to offset a surge in US crude inventories.
Sydney-based CMC Markets chief market strategist Michael McCarthy said that traders were “seeing a lot of upside potential, possibly based on tensions in the Middle East and Ukraine.” “Somehow, we are seeing investors looking away from the huge build in US [crude oil] inventories this week,” he added.
Libya’s National Oil Corporation declared force majeure on Wednesday at 11 oil fields after attacks by Islamists. The OPEC member country has been battling the rise of militias seeking control of its cities and oil wealth since the killing of former Liban leader Muammar Qaddafi in 2011.
Unabated fighting has seen its output reduced from a high of almost 1.5 million barrels a day to 150,000, according to analysts. In Ukraine, investors are closely watching latest efforts to prop up a ceasefire in the country’s eastern region, currently controlled by pro-Russia rebels. The 10-month conflict in the country — a key conduit for Russian energy exports to Europe — is seen as Europe’s worst since the war in the Balkans in the 1990s.
Meanwhile, data on Wednesday showed a 10.3 million barrel surge in US crude reserves in the week to Feb. 27, which dampened expectations of robust demand in the world’s biggest economy. The global oil market has lost about 50 percent of its value since June last year, weighed down by the global supply glut.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April slid to US$60.10 a barrel from US$61.67 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to US$49.83 a barrel from US$48.94 a week earlier.
PRECIOUS METALS: Gold and silver lost their shine as the dollar shot higher.
“Precious metals came under some renewed selling pressure as the dollar resumed its ascent against most currencies,” said Saxo Bank analyst Ole Hansen.
By Friday on the London Bullion Market, the price of gold fell to US$1,175.75 an ounce from US$1,214 a week earlier.
Silver slumped to US$15.99 an ounce from US$16.53.
On the London Platinum and Palladium Market, platinum slipped to US$1,166 an ounce from US$1,177.
Palladium rose to US$823 from US$808 an ounce.
BASE METALS: Base or industrial metals were mixed as investors reacted also to a growth outlook from commodities-hungry China.
China on Thursday lowered its economic growth target for this year to “approximately 7 percent”, scaling down expectations in the face of “formidable” difficulties for the world’s second-largest economy after its decades-long boom.
By Friday on the London Metal Exchange, copper for delivery in three months dropped to US$5,747.50 a tonne from US$5,862 a week earlier.
Three-month aluminum slipped to US$1,795 a tonne from US$1,810.
Three-month lead gained to US$1,806 a tonne from US$1,747.
Three-month tin grew to US$18,090 a tonne from US$17,910.
Three-month nickel increased to US$14,310 a tonne from US$14,110.
Three-month zinc retreated to US$2,016 a tonne from US$2,068.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
RSS