SHANGHAI, Jan 8 (SMM)- SMM believes LME zinc prices are likely to trade higher as the metal started 2018 with a new 10-year high at $3,375/mt. We see support from both the macro level and fundamentals. US dollar is set to stay soft in the short term despite the interest rates increases in 2017. Uncertainty over the real effect on the economy from the country’s tax reform and stronger EU economy also weighed on the dollar. Weaker US dollar and stronger Chinese yuan is bullish for base metals. Higher crude oil prices would also lead the movement in bulk commodities. Last week saw Brent crude oil top $68 a barrel for the first time since 2015. Separately, LME zinc inventory fell to a 10-year low at around 180,000 mt last week while reconstruction activities in the US following several hurricanes are set to see demand grow. The anticipation of expanding infrastructure investment in the US this year also boost the sentiment.  Last Friday, cancelled warrants of LME zinc jumped by 25,000 mt and the spot premium rallied to $20/mt. We see the risk of squeeze as position holders remained reluctant to make deliveries.