Copper edges up as dollar softens ahead of Fed testimony

LONDON, Feb 27 (Reuters) – Copper rose on Tuesday as a retreat in the dollar ahead of incoming Federal Reserve Chair Jerome Powell’s debut testimony before Congress supported interest in assets priced in the U.S. currency. Powell’s testimony will be closely watched for clues on the outlook for U.S. monetary policy, with many investors nervous about the Fed’s policy normalisation following years of stimulus. The dollar pulled back 0.1 percent against a basket of currencies ahead of the speech, due to take place at 1500 GMT. “The big item on the calendar today is the Fed speech coming later on, so you have a bit of nervousness around the dollar,” ING analyst Oliver Nugent said.  The market was lacking direction overall, however, he said. “There has been no strong momentum coming out of China.” London copper has held above the $7,000 a tonne mark since Feb. 14 and edged up on Monday on the back of strong import data from top metals consumer China. ICBC Standard Bank said in a note on Tuesday that it still sees a positive fundamental outlook for base metals, forecasting across the board deficits in 2018 and through to 2020. FUNDAMENTALS: * COPPER PRICES: London Metal Exchange copper was down 0.5 percent to $7,075.50 a tonne by 1030 GMT, having closed 0.2 percent higher in the previous session. * COPPER SPREADS: The discount for cash over three-month copper contracted to to its narrowest in six weeks on Tuesday at $32.25, from $42.25 a week ago. * COPPER TECHNICALS: LME copper looks neutral in a $7,079-$7,202 a tonne range, Reuters technical analyst Wang Tao said, though a break below $7,079 could establish a bearish target at $7,003.50. * ALUMINIUM PRICES: LME aluminium was up 0.7 percent at $21,53.50 a tonne. * ALUMINIUM SPREADS: Nearby aluminium spreads are under intense pressure, reflecting tightness in short-dated supply. The cost to roll aluminium for a day hit its highest since late 2016 on Monday at $11, and remains highly elevated at $10 a tonne. * ALUMINIUM STOCKS: On-warrant aluminium stocks, or those not earmarked for delivery, in London Metal Exchange warehouses fell by 23,425 tonnes to 1,085,175 tonnes, exchange data showed, pulling back from a recent 11-month high.