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Monday, June 21, 2010

Freeport-McMoRan (NYSE:FCX) Surges on Yuan News

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), along with a number of raw materials companies has been rising in price today as hopes the appreciation of the yuan against the U.S. dollar will help commodity companies going forward, after the announcement the Chinese will float their currency more against the greenback.

Shares of Freeport stood at $68.96, gaining $3.06, or 4.64%, as of 1:25 PM EDT.

One major problem many haven't considered yet, is the yuan, or renminbi, isn't assured of appreciating, and all the hand clapping and backslapping may be premature if the Chinese currency depreciates in value instead, which wouldn't be a stretch to consider at all.

Either way, the market is assuming the yuan will appreciate, and mining companies and commodity producers are benefiting from that assumption at this time.

No matter what happens though, it'll unfold over a period of time and not in the short term, which will be more sustainable whichever way things go.

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