Rubber Pares Weekly Advance on Stronger Yen Ahead of U.S. Data
Rubber declined for a second day, paring a second weekly advance, as the Japanese currency strengthened against the dollar ahead of data that may add to signs of an improvement in the U.S. economy.
Rubber for delivery in January on the Tokyo Commodity Exchange fell as much as 1.1 percent to 261.6 yen a kilogram ($2,685 a metric ton) and was at 264.1 yen at 11:20 a.m. local time. Futures have gained 1.1 percent this week, paring this year’s loss to 13 percent.
The yen climbed for a third day against the greenback before reports forecast to show housing starts rebounded and consumer confidence increased to a six-year high. The U.S. is the fourth largest consumer of rubber, accounting for 9 percent of global demand. U.S. stocks fell the most since June after improving economic data raised speculation the Federal Reserve will reduce stimulus.
“The drop in U.S. equities overnight damped market sentiment,” said Lee Chen Hoay, an analyst at Phillip Futures Pte. in Singapore. With a stronger yen, it is a “double whammy” for rubber, he said.
A report yesterday showed claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years, signaling the U.S. job market continues to mend.
Rubber for delivery in January rose 1.1 percent to 19,735 yuan ($3,230) a ton on the Shanghai Futures Exchange. Thai rubber free-on-board dropped 0.3 percent to 81 baht ($2.59) a kilogram yesterday, according to the Rubber Research Institute of Thailand.
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