LONDON: Copper rose to a one-week high on Wednesday as encouraging data from the United States raised hopes of a pickup in economic growth and demand for industrial metals, with a weak dollar helping cement gains.
Benchmark copper on the London Metal Exchange (LME) traded at $7,513 a tonne at 0934 GMT, from a close of $7,260 on Tuesday. The metal used in power and construction earlier hit a one-week high at $7,520 a tonne.
Encouraging housing data from the United States and improving business morale in Germany in the previous session helped bolster sentiment in financial markets, with European stocks trading higher while Italian and Spanish yields fell.
Investors' sentiment was also boosted by expectations of strong demand from banks for the European Central Bank's first ever offer of three-year loans aimed at easing the threat of a credit crunch.
"We had some really positive US housing data out yesterday which underpins what has been some really good data for the US over the past few months and showing that even with all the problems in Europe, US growth momentum seems to be picking up pace," said Gayle Berry, analyst at Barcap.
Lending support to metals prices was a rise in the euro versus the dollar. A weak dollar makes commodities priced in the US unit cheaper for holders of other currencies.
The market's positive sentiment was also helped by data showing China's refined copper imports grew 48 percent in November from a year earlier to reach their highest level in nearly 2-1/2 years, after buyers stepped up purchases to exploit a difference in prices between London and Shanghai.
"What's given it (the metals market) fuel is the Chinese trade data, which, although we got a taster for it earlier in the month... I think it's still helped to buoy sentiment," Berry said.
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