Tariff Threat Hits Copper

Copper prices have seen plenty of volatility this week as traders navigate an uptick in aggressive trade rhetoric from Trump and renewed tariff risks. The President has confirmed plans to go ahead with 25% tariffs on Canadian and Mexican goods along with an additional 10% levy on Chinese imports. The news on China is particularly worrying for copper traders. The risk now is that China retaliates with its own trade restrictions against the US, leading to a tit-for-tat cycle which ends up dampening commodities trade, weighing on copper prices.

Strong USD Hurting Copper

The uptick in USD over the back end of the week has created strong headwinds for copper prices and the broader commodities market. With trade tariffs now set to go ahead, upside inflationary risks for the US are seen rising, likely leading to a further delay in Fed easing. If this narrative gathers traction, USD is likely to remain strong near-term, putting further pressure on copper prices. For now, traders will be waiting to see if the current tariffs go into action next week, or if there is any last minute U-turn. If tariffs are actioned as planned, traders will then be watching for countermeasures from China, likely to weigh further on copper prices if seen.

Technical Views

Copper

For now, the market continues to hover around the 4.5785 level following the reversal lower from 4.8010. With momentum studies bearish, further losses towards 4.30 level can be seen near-term. Ultimately, bulls need to hold that level as support to keep fresh bearish momentum sellers from entering the market.