Copper prices declined on Monday as the dollar steadied against most major rivals amid uncertainity about the Federal Reserve's upcoming policy decisions. 

Copper three-month futures at the London Metals Exchange fell 0.3% to $8524 a tonne, while January copper futures at the Shanghai Exchange fell 0.2% to $9622 a tonne. 

The dollar index stabilized after New York Fed President said it's still too early to talk about interest rate cuts.

A drop in dollar usually boosts dollar-denominated metal futures and vice versa. 

However, copper is underpinned by potential drops in supply, especially from the FM.TO Cobre mine in Panama. 

Aluminium prices fell 0.7% at the London Metals Exchange to $2233, while nickel fell 1% to $16975, as zinc fell 0.8% to $2511, while lead shed 0.3% to $2075. 

Otherwise, the dollar index stabilized at 102.5 as of 16:21 GMT to 102.6, with a session-low at 102.3, 

Copper March futures fell 0.7% as of 16:14 GMT to $3.86 a pound. 

International benchmark Brent rose on Monday for the fourth straight day, hitting two-week high as Red Sea tensions increase.

The Houthi group in Yemen continue to launch attacks on commercial ships in the Red Sea, raising concerns about oil supply disruptions. 

Prices are also boosted by a plan presented by Russia to cut oil exports in December in order to achieve more balance in the markjets.

Brent Price Today 

Brent crude rose 2.1% to $78.63 a barrel, the higehst since December 5, with a session-low at $75.75, after rising 0.3% on Friday, the third profit in a row following strong Chinese industrial production data. 

Brent rallied 1.3% last week, the first weekly profit in two months away from recent six-month lows at $72.33, as the dollar lost ground.

Red Sea Woes 

Several major shipping companies decided to avoid passage through the Suez Canal temporarily, as Houthi militants continue to attack commercial ships in Red Sea. 

As geopolitical tensions increase and aggressie maritime attacks on commercial ships in the Red Sea pick up pace, oil prices are expected to tick higher as well.

Russian Exports 

Russia said on Sunday it'll deepen oil export cuts in December by nearly a million bpd or more, before the scheduled deadline. 

Such a step is aimed to boosting wobbling prices as demand in major global economies slows down. 

Dollar fell in European trade on Monday against a basket of major rivals, resuming losses and heading towards recent four-month lows once more.

The dollar selloff renewed amid prospects of early interest rate cuts by the Federal Reserve next March. 

The Index

The dollar index fell 0.2% to 102.38, with a session-high at 102.63, after rising 0.6% on Friday, the first profit in four days away from a four-month trough at 101.77. 

The index lost 1.35% last weekm, the fourth loss in five weeks as US yields tumbled following the Federal Reserve's policy meeting.

Fed Chair Jerome Powell said last week that historic policy tightening in the US is over, with policymakers now discussing prospects of interest rate cuts in 2024.

The quarterly economic outlook report by the Fed had a few important revisions:

The Fed expects total inflation at 3.2% this year, and 2.4% next year, down from 2.5%, while expecting a 2.2% inflation rate in 2025.

As for interest rates, the Fed changes prospects for US interest rates this year down from 5.75% to 5.5%, while expecting rates in 2024 at 4.75%, then at 3.75% in 2025.

US Rates

Following the meeting, the odds for a US 0.25% interest rate cut at the Fed March 2024 meeting surged to 87%, while odds for such a cut in May surged to 99%.

Markets now await Bank of Japan's last policy meeting of the year amid speculation the BOJ might exit the current cycle of policy tightening soon. 

Such speculation increased after a batch of data showed mounting inflationary pressures on Japanese policymakers, and after bullish remarks by BOJ Governor Kazuo Ueda. 

Markets expect Bank of Japan to maintain its ultra-easy policies unchanged, but surprises could definitely happen. 

Ueda

Bank of Japan Governor Kazuo Ueda said last week there are considerations that might bring interest rates away from negative zones. 

Such remarks came at the same day when Ueda met Japan's Prime Minister Kishida, hinting at a potential political change in dealing with the economy. 

Analysts now expect the BOJ to get rid of the current ultra-easy policies gradually, in turn sending yen to multi-month highs. 

Ueda said the central bank will get enough data by the end of the year to gauge whether it should maintain negative rates. 

Estimates 

City Index analysts said in a memo that Uedo put the foundations for exiting ultra-easy policies and negative interest rates in the near future.

National Australia Bank analysts believe the next BOJ policy meeting will be crucial in gauging the likely path ahead for monetary policies. 

No surprises are expected at this meeting, however it may lay the foundation for important policy revision in 2024.