Currencies, Copper Prices Waiting for Results of Recovery Bill

All eyes are on Obama's American Recovery package. If this bill gets passed it could put a bid under commodities. The stimulus package could artificially reflate the economy by putting millions of people back to work on public infrastructure projects. Also China has been re-stocking their dry bulk inventories recently which caused the Baltic Dry Index and dry bulk commodities to increase in value. I'm going to provide charts with commodity related currency pairs and Copper prices. Everything is intertwined in this global push to reflate so if the productivity injections are successful I think money could start to multiply or at least provide price support.

It looks like the so called carry trades/commodity currency pairs are all at inflection points. Comex Copper recently broke through the 50 day to the upside and is sitting just above trend resistance. If copper can hold 160 on this chart with conviction it could have some legs. But the rally could fail if China's re-stocking period is temporary or the U.S stimulus bill fails. I quoted a Reuters article with a Copper forecast plus provided news links below. It will be interesting to see what happens here.

Overnight update: Dow futures are down 67, S&P down 8.50, Copper futures down .09% to 161, WTI crude up 1% to 39.97, Gold is up 0.43% to 896, Euro/Dollar down, Russian banks seeking loans from foreign lenders..

"Copper prices are expected to recover to average $4,200 per tonne in 2009, supported by steady construction and infrastructure activity in China and modest recovery elsewhere, a consultant said on Monday. Standard Bank's (SBKJ.J) Head of Commodities Research Walter de Wet told Africa's largest mining conference he expected prices to pick up in the second half of the year." (Reuters, 2/9/09)

US bank bailout, stimulus fate hold copper down (Reuters)
Copper in Shanghai Drops on Caution Before US Stimulus Plan
Fortis Invst bullish on commodities, bearish on metals
UPDATE 1-Copper seen at $4,200/tonne in 2009 -consultant
Shanghai copper surges 5 pct on China recovery hopes
Stimulus package may boost copper prices


Comex Copper 2/9 (Source: Stockcharts.com)

$US/$Canadian (spot) (Source: Fxstreet.com)




$Australian/$US (Source: Fxstreet.com)

$Australian/JapaneseYen (Source: Fxstreet.com)

Brazil Real/Japanese Yen (Source: Quote.com)


Brazil Real/Chinese Yuan (Source: Quote.com)