Morgan Stanley sees sustained copper rally into 2026 on supply woes, weak dollar

Deutsche Bank has projected a further weakening of the U.S. dollar in the upcoming year, attributing this forecast to various economic factors and market conditions. The bank's analysis suggests that shifts in monetary policy and investor sentiment will play a crucial role in the dollar's performance.

Sterling has experienced a slight gain against the dollar, but analysts at Morgan Stanley suggest that this post-budget rally is likely over due to anticipated interest-rate cuts by the Bank of England. The currency's recent performance indicates a precarious position amid economic uncertainties.

Cameroon is facing a significant budget deficit projected to double by 2026, driven by increased spending needs. This financial strain highlights the challenges the country faces in managing its fiscal responsibilities amidst rising expenditures.

Kevin Hassett has emerged as the leading candidate for the position of Federal Reserve Chair, a development that could influence the U.S. dollar's value according to investors. This news follows reports of increased expectations for a potential interest rate cut by the Fed, which could further impact market dynamics.

Global stocks are projected to experience a modest increase in 2026, following a robust performance in the current year, according to a Reuters poll. This outlook suggests that while markets may stabilize, they are unlikely to replicate the strong gains seen in 2025. Investors are closely monitoring economic indicators that could influence market dynamics moving forward.

Deutsche Bank has raised its copper price forecast for 2026, reflecting a response to ongoing supply constraints in the market. This adjustment indicates a significant shift in expectations regarding copper availability and pricing dynamics.

The U.S. dollar is projected to decline further in early 2026, according to SEB strategists, as the normal data release cycle resumes following delays from the recent government shutdown. This decline is evident as the dollar was lower during midday trading.

UBS has indicated a structural bull case is developing in the copper market, suggesting positive long-term trends for copper prices driven by demand and supply dynamics. This analysis reflects UBS's ongoing assessment of market conditions and economic indicators.