NEW YORK: Cotton prices rose more than 1% on Friday as investors banked on hopes for more US economic stimulus and its likely fillip to demand for the natural fibre, while a sagging dollar added to the upbeat mood. The cotton contract for March was up 0.96 cent, or 1.4%, at 72.07 cents per lb by 11:50 a.m. EST (1650 GMT). However, the contract is down about 1.6% so far this week, which would be its first weekly decline in five weeks.
The dollar index was hovering near more than 2-1/2-year low against its rivals. A weaker greenback makes cotton less expensive for buyers of the natural fibre in other currencies.
"(It) seems like the market is recovering from last two days of decline, so some of this is technical in nature. It did find support on the ongoing trendline, which is to be upside," said Bailey Thomen, cotton risk management associate with StoneX Group.
"From a fundamental point of view, the markets are gaining some positivity from the discussion about another stimulus bill. We are seeing a little bit of buying activity, physical demand coming through," Thomen added. A bipartisan, $908 billion coronavirus aid plan gained momentum in the US Congress on Thursday as conservative lawmakers expressed their support and Senate and House of Representatives leaders huddled.
Total futures market volume fell by 9,480 to 12,612 lots. Certificated cotton stocks deliverable as of Dec. 3 totalled 101,220 480-lb bales, down from 113,325 in the previous session.
Source: Reuters