Copper slips as oil rebounds, dollar strengthens

Copper fell on Friday amid expectations that U.S. interest rates would stay higher for longer and an early setback in U.S.-Iran negotiations. Benchmark three-month copper on the London Metal Exchange was down 0.66% at $13,600.5 a metric ton by 0701 GMT. Expectations for higher-for-longer U.S. interest rates rose this week, with nearly half of Federal Reserve policymakers now believing they will need to raise rates this year. Higher interest rates dampen demand prospects for growth-dependent industrial metals. "The outlook for U.S. interest rates has a global bearing on commodity markets, with higher rates raising costs for importers,” Daniel Hynes, senior commodity strategist at ANZ, wrote in a note. An early setback in progress towards a long-term peace deal between Iran and the U.S. saw oil prices rebound after a slump earlier in the day, with Brent crude futures up 0.41%. Initial technical talks on a long-term peace were expected to take place on Friday, but U.S. Vice President JD Vance dropped plans to travel to the negotiations and the host, Switzerland, confirmed talks would not take place. The U.S. dollar strengthened after the setback. A stronger dollar makes greenback-denominated metals more expensive for buyers using other currencies. Aluminium was firm after dipping earlier in the week. It climbed 0.58% to $3,406 a ton on the LME. On Thursday, Goldman Sachs raised its average aluminium price forecast citing an assumption that Middle East production will face a slower recovery despite the preliminary agreement to end the war. Among other metals on the LME, nickel dipped 0.21% to $17,805 a ton, tin eased 0.33% to $53,475 a ton, zinc fell 0.58% to $3,617 a ton, and lead declined 0.58% to $1,972.5 a ton. The Shanghai Futures Exchange is closed as China is on holiday for the Dragon Boat Festival. (Reporting by Solomon Cefai; Editing by Eileen Soreng and Editing by Jan Harvey)