Palladium climbs over 2% even as dollar muscles up

Palladium prices rose on Tuesday even as dollar gained ground against most major rivals, but strong risk appetite underpinned industrial metals.

China cut its mainline one-year borrowing rates as expected this week amid efforts to boost credit demand.

Economists point to the high debt levels carried by several local governments in China, which constitute a significant risk to the economy.

Otherwise, the dollar index rose 0.3% to 103.5 as of 17:00 GMT, with a session-high at 103.7, and a low at 103.01.

A stronger dollar usually weighs on dollar-denominated metals and commodities as they become costlier to holders of other currencies.

Palladium is used extensively in the electronics and automotive industries for its ability to reduce exhaust fumes.

On trading, palladium futures due in December rose 2.2% as of 17:01 GMT to $1,270.5 an ounce.