A weakening dollar drives aluminium to a month-high

Aluminium traded on London Metal Exchange hit one-month high on Tuesday, August 16, as dollar slipped,  wighed on by signals that the U.S. interest rates would remain on hold, and speculators sped up to buy the metal used in cans to spacecrafts.

The dollar index nose-dived to a seven-week low after a policymaker at the U.S. Federal Reserve said that the central banks might have to raise inflation targets to facilitate growth and give support to a much 'looser fiscal policy' in future.

"The main drivers seem to be currency and macro today rather than any sudden real changes in fundamentals," observed analyst David Wilson at Citi, London.

Price Source: London Metal Exchange

Aluminium edged 0.7 per cent higher to touch $1,687, the highest since July 15. The gain in the commodity has triggered 'buy' signal for CTA (Commodity Trade Advisor) funds, many of which rely on algorithms based on market momentum and other relevant technical signals to analyse the prospect, a trader said.

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