LME aluminium to find relief from weaker dollar

<p>The US dollar index fell on negative US economic data. This will help underpin LME aluminium at USD 1,585-1,600/mt. Base metal prices on the SHFE are expected to continue diverging on Wednesday, Shanghai Metals Market foresees. <br /><br />&ldquo;The dollar weakened overnight, but base metals made little response to this, and base metal prices are expected to continue diverging today,&rdquo; SMM says. &nbsp;<br /><br />SHFE 1611 aluminium should move around RMB 12,000/mt, with trading band between RMB 11,950-12,050/mt. <br /><br />In east China&rsquo;s spot aluminium market, spot premiums of RMB 90-130/mt are expected over SHFE 1609 aluminium contract.<br /><br /><strong>Key macroeconomic indicators for base metal prices</strong><br /><br />Germany&rsquo;s industrial output in July and US July JOLTs will be released today. The US dollar index slumped overnight, boosting precious metals . But base metals and crude oil received little boost.<br /><br />Germany&rsquo;s final July manufacturing PMI topped market expectations and June&rsquo;s, and commodity production also grew steadily, boding well for Germany&rsquo;s July industrial production.<br /><br />China&rsquo;s forex reserve in August slated for release today is expected to fall as yuan&rsquo;s devaluation may precipitate capital outflows. But market expectations that China&rsquo;s economy will stabilize combined with attraction to investment by rising home prices, should constrain outflows somewhat.<br /><br />EIA will release annual energy outlook report today. US crude oil production has been active recently, and rig count increased further last week. EIA raised its expectations of domestic oil output in the next few months. Should the EIA lift its forecast for shale oil production today, crude oil will fall sharply.<br /><br />San Francisco Federal Reserve Bank chairman will speak today. He supported a Fed rate hike before the release of US non-farm data in August.</p>