LONDON: Copper prices extended gains to hit three-week highs on Thursday on hopes for a halt in US rate hikes after inflation slowed, while falling dollar also helped the metal to ignore weak export data in top consumer China.

Benchmark three-month copper on the London Metal Exchange rose 2.2% to $8,682 per metric ton by 1604 GMT, after touching its strongest since June 22 at $8,710 and breaking through its 100-day moving average of $8,599.

Copper used in power and construction was heading for its biggest weekly growth since late March after surprisingly slow US inflation signalled that interest rate hikes could potentially finish by the end of the month.

The dollar index hit its new 15-month low on Thursday, making commodities priced in the US currency less expensive for buyers using other currencies.

“Risk appetite received quite a boost from the weaker than expected CPI,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“China’s exports are not having a good time and that reflects that the global economy is still somewhat in a soft spot. And additional stimulus in China may not be forthcoming this quarter, we may have to wait for the fourth quarter.”

Data on Thursday showed that China’s exports fell last month at their fastest pace since the onset three years ago of the COVID-19 pandemic, as an ailing global economy puts mounting pressure on Chinese policymakers for fresh stimulus measures.

Strong domestic production and weak demand restrained copper imports in top consumer China, data from the General Administration of Customs showed.

LME aluminium rose 1.9% to $2,279 per metric ton, zinc and lead climbed 1.8% to $2,469 and $2,122.5, respectively, while nickel dropped 1.8% to $21,285 and tin dipped 0.9% to $28,800.