METALS-London copper edges up as dollar takes breather from gains
* Dollar steadies below below 6-week high * Tin backwardation strikes 3-yr peak on Indonesia shortfall * Coming up; U.S. Challenger layoffs for August at 1130 GMT By Melanie Burton SINGAPORE, Sept 5 (Reuters) - London copper nudged higher on Thursday after a sharp loss in the previous session, as the dollar took a breather from recent strength ahead of key U.S. data and as signs of the Chinese economy stabilising raised hopes for demand. Copper prices have fallen to the low end of their recent $7,000-$7,500 a tonne range due to a buoyant dollar as investors priced in a tapering of the U.S. Federal Reserve's huge bond-buying program as early as this month. The dollar was just below a six-week high on Thursday in part due to strength in the euro as euro zone business orders picked up. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies. "The improving euro zone situation has been mitigating some of the dollar strength after Fed expectations and geopolitical concerns drove up the dollar," said Thomas Lam, chief economist at DMG & Partners Securities in Singapore. "We could see some recovery in copper prices in line with the improvement in the global economy although I don't expect the growth background in China to be a significant driver for copper prices in the near term," he added. Three-month copper on the London Metal Exchange rose as much as half a percent before paring gains by 0341 GMT to trade up 0.2 percent at $7,137.50 a tonne. It fell 1.5 percent on Wednesday. The most-traded December copper contract on the Shanghai Futures Exchange slipped 0.9 percent to close at 51,670 yuan ($8,400) a tonne. Growth in China's services sector hit a five-month high in August, the latest evidence that the world's second-largest economy may have avoided a sharp slowdown. The U.S. economy expanded at a "modest to moderate" pace in most of the country between early July and late August, according to a Federal Reserve report that was just strong enough to reinforce the prospect of a pullback in monetary stimulus. Markets are looking ahead to U.S. labour data on Friday. U.S. employers likely stepped up hiring in August, potentially paving the way for the Fed to start cutting back its bond purchases programme later this month. In other metals, Indonesia's No. 1 tin exporter, state-backed PT Timah, has halted shipments and declared force majeure, blaming new trading rules and dealing a blow to government efforts to boost the nation's influence in commodity markets. The shortfall in supply has helped drive up cash prices to a $125 premium against the benchmark three-month contract during Wednesday's evaluation, the highest level since August 2010. PRICES Three month LME copper Most active ShFE copper Three month LME aluminium Most active ShFE aluminium Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Three month LME tin
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