Copper prices rose on Thursday as the dollar fell against most  major rivals, with the metal extending its recent streak of gains while markets assess the economic impact of the Federal Reserve's recent rate hike. 

Copper futures due in three months at the London Exchange fell 0.2% to $8,874.

The Federal Open Market Committee hiked interest rates by another 0.25% on Wednesday as expected. 

Fed Chair Jerome Powell warned that the banking troubles could lead to a crediting crisis with a large impact on the US economy.

The dollar fell on Thursday, boosting dollar-denominated metals futures. 

Copper May futures at the Shanghai exchange rose 0.5% to $9,982 a tone. 

Copper demand is improving in China as seasonal demand rebounds while the economy overall improves. 

The ICSG organization estimates the refined copper market to have been in a surplus of 103 thousand tones in January, compared to a surplus of 10 thousand tones in February.

The dollar index fell 0.1% to 102.2, with a session-high at 102.5, and a low at 101.9.

Copper futures due in May rose 1.7% as of 14:57 GMT to $4.11 a pound. 

US unemployment claims fell to 191 thousand in the week ending March 18, below estimates of 198 thousand, and down from 192 thousand in the previous reading. 

Dollar fell in European trade on Thursday, sharpening losses for the sixth straight session and plumbing seven-week lows on speculation about cutting US interest rates later this year.

Such speculation grew after the Fed's press release and Jerome Powell's statements and quarterly forecasts, with investors now convinced the Fed is nearing the end of the policy tightening cycle.

The Index

The dollar index fell 0.6% to 101.93, the lowest since February 3, with a session-high at 102.50.

The index lost 0.7% yesterday, the fifth loss in a row after finishing up the Federal Reserve's meeting, and the collapse in US treasury yields.

The Fed

The Fed announced a 0.25% hike in interest rates to below 5%.

It's the ninth rate hike in a row since the starting the current cycle of policy tightening in March 2022

The Federal Reserve asserted the US banking system remains strong and sound, and that recent developments will likely lead to stricter crediting criteria for individuals and corporations, which might impact growth and inflation.

The Federal Open Market Committee will continue to monitor data and the impact of the monetary policy, with the aim of bringing inflation back to the 2% target.

The Fed cut its growth forecasts for the this year and the next, while expecting one more rate hike this year.

The Fed expects the US GDP to grow by 0.4% this year, down from 0.5% in previous forecasts, while cutting 2024 growth forecasts from 1.6% to 1.2%, but raised 2025 forecasts from 1.8% to 1.9%.

The Fed also cut unemployment forecasts for this year from 4.6% to 4.5%, but maintained 2024 forecast at 4.6%.

And finally, the Fed held its forecasts for interest rates this year at 5.1%, pointing to one more rate hike this year.

Powell

Fed Chair Jerome Powell said the Fed will do whats "necessary" to bring inflation back to 2%, with another rate hike if needed.

Powell said US growth was impacted by higher interest rates, while the labor sector remains strong, and unemployment low.

He asserted the Fed is working with the US Treasury Department to scan the banking system and guarantee its strength and protect deposits. 

And finally he said that it's unlikely for the Fed to cut interest rates this year, and a rate increase is possible. 

US Rates

Futures markets predict US interest rates at 4.25% in December, less than before.

Markets are still pricing in a 0.25% rate hike in May with a 44% chance. 

Bank of England voted to increase interest rates by 25 basis points to 4.25%, the highest since the global financial crisis in 2008, following a 0.5% hike at the previous meeting.