Copper hovers near 3-month low

Reuters

Melbourne

London copper was mired near three-month lows on Monday as the dollar held strong on expectations the United States could raise interest rates next month, boosting capital costs and encouraging investors to bet prices would fall further.

The U.S. economy continued to gather pace during the second quarter, with home resales climbing, while conditions for a rate increase are "on the verge of broadly being met," a Federal Reserve member, said.

A stronger dollar has a double negative hit on commodities, by making them more expensive for buyers paying with other currencies, and by raising the cost of borrowing for industry.

"Markets are still only pricing in a 30 pct chance of a June hike, which suggests there may be some more weakness to come if the Fed does indeed tighten on the 15th," said Capital Economics in a note.