London Metal Exchange (LME) copper futures rebounded after early losses in Asia on Tuesday as the dollar's lingering fragility induced steady bargain-hunting by fund operators. Early rounds of follow-through profit-taking had pushed down benchmark copper futures, carrying over the mood from London trade.
Copper came off a near one-month high of $2,975 per tonne in London as the dollar edged up from a record low versus the euro.
But underlying sentiment for copper was strong after steady draws in LME warehouse stocks and robust demand seen keeping supplies tight and the red metal buoyant.
"The dollar's moves are driving LME prices now, but sentiment appears to be strong with plenty of bargain hunters waiting for dips," said an LME trader at a Japanese trading house.
At 0228 GMT, the three-month LME copper futures contract was quoted at $2,958/$2,965 per tonne against $2,951 in London on Monday.
The three-month contract fell as low as $2,940 in early trade.
Key January Shanghai copper futures rose 240 yuan a tonne to 28,840 yuan, having fallen as low as 28,370 in early morning trade.
A series of verbal interventions have lifted the dollar from lows against other major currencies, although they were not enough to change the present bearishness.
European Central Bank President Jean-Claude Trichet warned against the euro's rapid climb on Monday, saying its recent rise was "brutal" and unwelcome.
Finance Minister Sadakazu Tanigaki said on Tuesday that the Japanese authorities would intervene in the foreign exchange market if currency rates deviated from economic fundamentals.
On Monday, the dollar hit a record low of $1.2985 against the euro.
The greenback stood at $1.2921/23 against the euro as of 0228 GMT. Against the yen, it was at 105.54/59 yen compared with 105.48 in late US trade and a seven-month low of 105.28 yen hit overnight.
Metal market players were looking to the US Federal Reserve's policy-setting meeting and US trade data, both due on Wednesday, for fresh direction. Other LME metals were little changed from Monday's London closes.
LME aluminium was steady at $1,802/$1,807 per tonne against $1,803 in London.
In Shanghai, the most active January aluminium futures fell 40 yuan to 15,920 yuan.
Three-month nickel futures on the LME stood at $13,750/$13,950 per tonne against $13,850 in London. LME tin futures were at $9,000/$9,100 per tonne against $9,075 in London.
LME zinc was at $1,074/$1,079 per tonne against $1,080 in London on Monday.
Lead futures were at $944/$948 against $946.
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