Feb 1 (Reuters) – Benchmark copper prices were firmer in early trade on Tuesday, as the U.S. dollar lost ground and risk sentiment improved after Federal Reserve policymakers allayed investor fears of a rapid pace of monetary tightening.
Three-month copper on the London Metal Exchange was up 0.3% at $9,530.50 a tonne, as of 0236 GMT, following a 2.2% decline in January, pressured by the dollar’s strength and concerns over prospects of a more hawkish U.S. central bank.
A firmer dollar makes greenback-priced metals more expensive to holders of other currencies, while higher U.S. interest rates could trim liquidity in financial markets and hamper global economic recovery prospects, thus hurting demand for metals.
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The dollar nursed its wounds following its biggest drop in nearly three weeks against major peers, as Fed policymakers signalled a lift-off in rates in March, but spoke…