Copper up on hopes for Greece austerity plan approval

SHANGHAI: Copper edged up on Tuesday on increasing confidence that the Greek parliament will pass an unpopular austerity plan, which lifted the euro against the dollar.

Three-month copper on the London Metal Exchange ticked up 0.4 percent to $9,005 a tonne by 0117 GMT, after falling 0.8 percent in the previous session.

The most-active September copper contract on the Shanghai Futures Exchange gained 0.8 percent to 67,340 yuan per tonne, after closing 1.5 percent lower previously.

French banks, among the most exposed to the Greek debt crisis, have reached an outline agreement to roll over holdings of maturing Greek bonds. French President Nicolas Sarkozy confirmed the breakthrough on Monday and German bankers voiced their interest in the "French model."

Greek lawmakers began debating on Monday evening a 28 billion euro ($40 billion) package of measures to increase taxes and cut fiscal spending that is critical to winning a new round of international funding to keep the country afloat.

The euro zone's economic recovery remains self-sustaining despite the region's debt crisis, senior ECB policymaker Juergen Stark said on Monday, though he reiterated the bank's fears over a Greek default.

US consumer spending failed to rise in May, breaking 10 straight months of gains, as households struggled with rising prices and automakers could not deliver some popular models due to the fallout from Japan's earthquake.

When adjusted for inflation, spending slipped 0.1 percent, the Commerce Department said on Monday. It was the second consecutive monthly drop on that basis. The report, which confirmed that underlying inflation had quickened.

The euro extended gains on Tuesday as investors bet Greece's parliament will approve a fiscal austerity package needed for the country to get emergency aid and avoid defaulting on its debt.

Hopes of Greece passing the package and a firmer euro also lifted US crude oil, which rose above $91 a barrel.

US stocks snapped a three-day losing streak and the euro rallied against the dollar on Monday.

Copyright Reuters, 2011