Copper drops 1% as dollar gains ground

Copper futures fell nearly one percent as the dollar index edged up, following earlier data from China, the world's largest metals consumer, and the US, and ahead of a testimony by Federal Reserve Governor Randal Quarles on supervision and regulation before the House Financial Services Committee, in Washington DC. 

As of 01:41 GMT, copper futures due on May 15 fell 0.68% to $307.45 a pound from the opening of $309.55, while the dollar index inched up 0.19% to 89.60 from the opening of 89.42. 

Earlier data from China, which accounts for 40% of global copper demand, showed the seasonally adjusted reading for first quarter GDP growth at 1.4%, down from 1.6% in the fourth quarter, and missing expectations of 1.5%. 

On a yearly basis, GDP growth steadied at 6.8% in line with expectations, while retail sales accelerated to 10.1% y/y from 9.7%, as industrial production slowed down to 6% in February from 7.2%, missing expectations of 6.4%. 

Earlier US data showed housing starts rose 1.9% to an annualized 1.319 million units in March, compared to a 3.3% drop in February to 1.295 million, while analysts expected a 2.5% rise to 1.267 million. 

Building permits rose 2.5% to 1.354 million units, compared to a 4.1% fall in February to 1.321 million, while analysts expected no change at 1.321 million, as industrial output slowed down to 0.5% from 1.1% in February, beating forecasts of a 0.3% rise. 

The Capacity Utilization Rate inched down to 78% from 78.1 in February, also beating forecasts of 77.9%, while Federal Reserve Bank of San Francisco President John Williams spoke earlier today about monetary policy at a global symposium co-hosted by the National Association for Business Economics and Bank of Spain, in Madrid.