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MTECHTIPS:-Copper bounces off 6-year low as PBOC eases fear on yuan

MTECHTIPS:-Copper bounces off 6-year low as PBOC eases fear on yuan

Copper prices bounced off a six-year low on Thursday, after the People’s Bank of China reassured markets that it will not continuously devalue the yuan. The central bank said in a closely-watched press conference earlier in the day that there was no basis for further depreciation in the yuan, easing concerns over a full blown currency war that could destabilize the global economy. China’s yuan opened slightly weaker on Thursday, but losses were limited as policymakers stepped up intervention in the market in a bid to stabilize prices. Copper for September delivery on the Comex division of the New York Mercantile Exchange inched up 0.8 cents, or 0.34%, to trade at $2.358 a pound during European morning hours. On Wednesday, copper tumbled to $2.292, a level not seen since June 2009, before turning higher to end at $2.350, after the People’s Bank of China took initial steps to stabilize fluctuations in the yuan, one day after devaluing its currency by the highest amount in more than two decades. China allowed the yuan to fall sharply this week to hit the lowest level since October 2012. The steep decline stoked concerns that China may allow the yuan to continue to depreciate, fueling fears over a currency war, as Beijing aims to make the nation’s ailing exports more competitive on the global stage.

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