Aluminum futures closed a bit lower this week, declining 0.6% due in part to pressure on the base metals complex from a rise in the value of the U.S. dollar.
According to a recent report from the Economic Calendar, the dollar climbed in comparison to rival currencies with Automatic Data Processing releasing positive private payroll data. Donald Levit, a strategist for the Economic Calendar, wrote: “A higher U.S. dollar is negative for dollar denominated commodities because it decreases demand for the commodities from holders of international currencies.”
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Economic Calendar speculated that aluminum upside could be on the horizon with buyers in China locking in prices for October shipments. That is a popular month for the Far East nation to stock up on the metal in time for winter when inclement weather can hinder shipments.
Domestic Construction Spending Hits One-Year Low
With China close to stocking up on aluminum for its upcoming construction projects, the U.S. Commerce Department recently announced domestic construction spending declined 0.6% to its lowest point since June 2015, reports our own Jeff Yoders.
Yoders wrote: “Economists polled by Reuters had forecast construction spending increasing 0.5% in June after a previously reported 0.8% drop in May. Their June estimates were largely based on the government’s assumptions for private residential and nonresidential construction spending in the advance GDP report.”
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