Spot February lost 1.75 cent to end at $1.4335 a lb.. Other contracts settled 1.70 to 2.10 cents lower. Though some sellers had been probing the downside all week, investors holding long positions worked the upside to protect their portfolios.
But, with most participants on hold all day waiting for word from the Fed, metals traders said, few participants wanted to take the risk one way or the other, allowing short sellers to have their way.
"During the course of the day, most of the market was waiting for the Fed announcement, because the dollar's very closely correlated to metals at the moment," a trader said. Copper was pressured further when the dollar recovered from declines and gained against the euro and yen on Wednesday ahead of an expected Federal Reserve interest rate increase.
Traders took as a foregone conclusion that the Fed would increase the target on the overnight interest rate by a quarter percentage point to 2.5 percent, which the central bank did in its sixth credit tightening since June.
Analysts said the Fed's statement accompanying its decision held no surprises at all. "It's essentially a reprint of the December statement. They continue to hint there will be another quarter point at the next meeting," said Chis Low, FTN Financial chief economist.
In its statement, the Fed's reference to tightening credit continued to read "at a measured pace," and the central bankers repeated that they saw equal risks of inflation and growth.
London Metal Exchange copper traded slightly higher after the Fed's statement had a mildly negative impact on the dollar.
LME copper for three-month delivery finished the on Wednesday evening kerb at $3,010 per tonne, down from Tuesday's sharply lower ending at $3,042 a tonne. On Wednesday's range extended down to $3,001 from an overnight high at $3,060.