SINGAPORE Copper turned lower on Monday as the dollar firmed slightly but losses were limited by hopes of new stimulus measures from Europe and the United States, while traders also eyed factory data from top metals consumer China for further trading cues.
The European Central Bank's policy-setting meeting scheduled for Thursday was always going to be important given the threat the long-running euro zone crisis poses to the global economy, but it has become pivotal after the ECB chief Mario Draghi's pledge last week to do whatever was needed to save the euro.
"There are still some feel good factors running through the market," said senior commodities strategist Nick Trevethan of ANZ in Singapore.
"Draghi's comments have been reiterated by various other European leaders. We should see some follow through buying copper on optimism that we might see some more significant action with the ECB and the FOMC meetings this week."
Three-month copper on the London Metal Exchange traded at $7,552 a tonne at 0721 GMT, down 0.21 percent after gains of more than 1 percent in the previous session. Copper is set to close the month down more than 1 percent, having shed more than 13 percent from the year's high hit in February.
The most-traded November copper contract on the Shanghai Futures Exchange trimmed gains to 54,830 yuan ($8,600) a tonne, up 0.11 percent. It hit a high above 55,300 yuan earlier in the session.
Expectations of stimulus measures from both sides of the Atlantic helped to lend a steadier tone to equities and commodities markets across the board until the euro gave up gains later in the session. <MKTS/GLOB>
The euro slipped on Monday as short-term technical charts flashed a bearish signal, while the dollar edged up by a slight 0.13 percent against a basket of currencies .DXY. A stronger dollar makes commodities more expensive for holders of other currencies. <USD/>
The Federal Reserve holds a policy meeting on Tuesday and Wednesday, with speculation rising it might do more to bolster recovery after data showed U.S. second-quarter gross domestic product expanded at the weakest pace since the third quarter of 2011.
Copper prices this week will also take direction from data out of top consumer China.
"China's PMI number on Wednesday is the make or break. We're looking for a stronger second half for copper, so this will be a very important number," Trevethan added.
China's official manufacturing sector index, to be released on Wednesday, will be scoured for more evidence that loosening steps taken by Beijing in the past few months have filtered down to the real economy, helping stimulate growth and metals demand.
The index may have inched up to 50.3 in July from 50.2 in the previous month, reinforcing signs that the world's second-largest economy is stabilizing due to increased policy support.
Positive signs emerged earlier this month that China's steps were having an effect after a preliminary indicator showed manufacturing output in July grew at its fastest pace in nine months.
China is the world's biggest copper consumer, accounting for 40 percent of refined copper demand last year. But demand so far in 2012 has been lacklustre as the world's biggest commodity consumer has been hit by a slowdown in its export markets.
"It is a tough time for the industry right now," said a Shanghai-based copper trader.
Other economic events that could swing commodities direction for the week ahead include U.S. vehicle sales and construction spending, while key non-farm payrolls data for July is due on Friday.
In other metals, nickel prices have been supported by a change in Indonesia's export regulation, traders said.
Japan's imports of nickel ore from Indonesia grew more than four times from a year earlier to 136,600 tonnes in June, the Ministry of Finance's monthly customs data showed on Monday.
Cargoes that had been delayed in the wake of the implementation of a new tax in Indonesia arrived in May and June, an official at Japan's Mining Industry Association told Reuters last week.
LME nickel prices rose 0.1 percent, after hitting a three-year trough of $15,450 last week.
(Editing by Himani Sarkar)