By Li Xiaowei Dec. 17 (Bloomberg) -- Copper rose from near the lowest in more than three years in London after the Federal Reserve cut interest rates to as low as zero and signaled it will continue to buy assets to bolster the world’s largest economy. The rate cut made the greenback the lowest-yielding currency among industrialized nations, encouraging investors to buy other assets. The dollar traded near the lowest level in more than two months versus the euro. The “dollar’s decline suggests a rebound in investors’ sentiment” for riskier assets, analysts led by Tan Wentao at HNA Topwin Futures Co. said in an e-mailed report today. “Some commodities may rebound in the near term despite weak fundamentals for the sector as a whole.” Copper for three-month delivery rose as much as 1.8 percent to $3,125 a metric ton on the London exchange and traded at $3,090 at 3:32 p.m. in Shanghai. The metal is still down 2.7 percent this week after a 4.1 percent gain last week. “Base metals should fall after strong gains in an almost universally agreed weak commodity environment,” Mark Pervan, head of commodity research at Australia and New Zealand Banking Group Ltd., wrote in an e-mailed report. “A surprisingly weak dollar appears to be having little positive effect and a raft of supply cutback news looks priced in.” The Federal Reserve yesterday said it will target a federal funds rate of between zero and 0.25 percent as it seeks to end the longest slump in a quarter-century. The copper price is down by 54 percent this year, heading for the first annual drop since 2001, on concerns a global recession will reduce demand for raw materials and as investors sold commodities to raise cash amid a credit crunch. Copper fell to as low as $2,991 on Dec. 5, the first time it dipped below $3,000 since May, 2005. Dollar Falls The dollar traded at $1.4029 to the euro as of 3:35 p.m. in Shanghai from $1.4147 it reached yesterday, the weakest level since Oct. 1. March-delivery copper on the Shanghai Futures Exchange closed down 0.4 percent at 23,710 yuan ($3,467) a ton. China’s yuan rose 0.11 percent to 6.8387 a dollar at 2:34 p.m. in Shanghai. “With the dollar going down and Chinese yuan going up, we expect Shanghai copper to fare weaker than its London counterpart in the near future,” HNA Topwin analysts wrote. Among other LME-traded metals, aluminum was 1.6 percent up at $1,495 a ton, zinc rose 1.5 percent to $1,104, lead gained 1.1 percent to $1,000, nickel added 1.1 percent to $9,800 and tin jumped 4.4 percent to $11,400. To contact the reporter for this story: Li Xiaowei in Shanghai at xli12@bloomberg.net

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