The dollar slumped against the euro and a basket of currencies after a senior Chinese currency regulator repeated warnings about investing too heavily in dollar-denominated assets.
Copper futures rose 0.2 percent in New York and closed just higher in London.
Aside from the weak dollar, the metal was supported by a crippling mine protest in Chile that has that has more than halved output from the El Teniente, the world's fifth largest copper mine owned by Codelco.
Codelco CEO Diego Hernandez told Reuters on the sidelines of an industry conference in New York on Tuesday that he expected the protests to be resolved as soon as this week.
US copper futures' most-active contract, July, finished up 0.75 cent at $4.1480 per lb, after trading between $4.1320 and $4.1480.
Benchmark three-month copper on the London Metal Exchange closed at $9,140 a tonne, up 0.05 percent from Monday's close of $9,135. LME copper hit its highest in a month at $9,278.50 a week ago, but has failed to gain any momentum.
Tuesday's gains in copper came after China's currency regulator Guan Tao said in an article on the website of a Beijing-based think tank that the country must be alert to the risk of holding too many dollars when Washington was pursuing loose monetary and fiscal policies.
Although Guan's comments were later removed from the website, the dollar extended losses against the euro and yen after Federal Reserve chairman Ben Bernanke acknowledged a slowdown in the US economy..
Later in the week, investors will be focusing on Chinese trade figures, due on Thursday. Analysts expected a small increase in refined imports from April when they fell 16.6 percent on the month to 160,236 tonnes.
China is the world's top consumer of base metals, accounting for nearly 40 percent of copper demand last year.
"I am quite optimistic about the Chinese data," said Daniel Briesemann, an analyst at Commerzbank. "I think we could see the downward trend come to an end or at least slow down."
Falling inventories of copper on the Shanghai Futures Exchange and good arbitrage opportunities also look encouraging for Chinese imports, Briesemann added.
Nickel prices ended a shade lower, keeping to forecasts that the market will soften over the next few months as European stainless consumers hold off purchases in part due to slow demand.
Nickel ended at $22,625 a tonne compared with a close of $22,630 on Monday.
Copyright Reuters, 2011