The dollar strengthened as expectations of another US rate hike this year were kept alive by a policy statement that indicated huge emergency funds pumped into the economy since 2009 could be trimmed.
"The recovery in copper prices from the early May lows to the recent highs was helped by the weakening dollar," Julius Baer analyst Carsten Menke said. "We see the dollar strengthening in the second half of this year. That should cause some headwinds for the metals markets."
Below-forecast US inflation and retail sales data on Wednesday, coming hot on the heels of reports showing Chinese growth may lose momentum, had already reinforced concerns about the outlook for raw materials demand.
Overall, the outlook for Chinese growth will be the leading driver for copper prices, Menke said.
"The data we've seen this week in terms of fixed asset investment, infrastructure and also property reflects the market's belief that we're about to see a slowdown from that side," he said. "That is something the copper market is (reflecting) currently."
LME COPPER: London Metal Exchange copper was untraded in official midday rings, but was last bid down 0.9 percent at $5,665 a tonne.
FEDERAL RESERVE: The Fed raised interest rates for the second time in three months and said it would start cutting its holdings of bonds and other securities this year.
COPPER STOCKS: Copper inventories in London Metal Exchange warehouses fell another 4,125 tonnes, exchange data showed, taking them to their lowest in more than six weeks.
STEEL PRICES: Steel material zinc rose after capacity cuts in China drove up steel prices by 3 percent on Thursday. LME zinc was also untraded in official rings, but was last bid up 0.8 percent at $2,513 a tonne.
ZINC DEFICIT: The global zinc market deepened its deficit to 92,400 tonnes in April from a revised deficit of 72,700 tonnes in March, data from the International Lead and Zinc Study Group (ILZSG) showed.
LME ZINC STOCKS: Zinc stocks in LME warehouses <MZN-STOCKS> fell another 1,800 tonnes to 316,175 tonnes, their lowest since early 2009, exchange data showed.
RUSAL: Russian aluminium giant Rusal said it plans to boost its production by 19 percent from 2016 levels to 4.4 million tonnes by 2021 amid rising global demand. Aluminium was down 0.4 percent at $1,875 in official trading.
OTHER METALS: LME lead was up 0.8 percent at $2,095 a tonne in official midday trading, while tin was flat at $19,225 a tonne. Nickel was 0.6 percent lower at $8,885 a tonne.