By Anna Stablum April 29 (Bloomberg) -- Copper may rise in London for the first time in three days on a weaker dollar and after the Federal Reserve pledged to keep interest rates low to boost economic growth. The Federal Open Market Committee said yesterday in a statement it would keep the benchmark rate near zero for an “extended period,” adding that the labor market is “beginning to improve.” The FOMC left the main interest rate in a range of zero to 0.25 percent, where it has been since December 2008. The U.S. Dollar Index, a gauge against six counterparts, fell as much as 0.4 percent for the first decline in four days, making dollar-priced metals cheaper to other currency holders. “Rates aren’t going to be rising and that is positive,” said Robin Bhar, an analyst at Credit Agricole CIB in London. “It confirms as the economy stabilizes, and as it continues to recover, the Fed will do all it can to accommodate that and will maintain pro-growth policies.” Copper for delivery in three months fell $15, or 0.2 percent, to $7,385 a metric ton at 10:45 a.m. on the London Metal Exchange. The contract reached $7,360 yesterday, the lowest since March 25. Futures for July delivery declined 0.6 percent to $3.3675 a pound on the Comex in New York. LME copper is down 4.7 percent this week on concerns a sovereign debt crisis in Greece may stall the region’s economic recovery. The Dollar Index has risen 0.9 percent this week. “The dollar was a safe-haven over the last few days,” Bhar said. “Now that some of these concerns over Greece have eased a little bit, the dollar is coming off.” Greek Rescue German Chancellor Angela Merkel and the International Monetary Fund pledged yesterday to step up efforts to overcome the Greek fiscal crisis. “It’s completely clear that the negotiations between the Greek government, the European Commission and the IMF need to be sped up now,” Merkel said in Berlin. Alongside IMF Managing Director Dominique Strauss-Kahn, she said the “stability of the euro zone” was at stake if a 45 billion-euro ($59 billion) loan package for Greece can’t be delivered fast. A failure by policy makers to match such talk with action has fanned concern that the crisis will spread beyond Greece. “The concerns about sovereign debt and contagion are still with us, but there is a bit of cautious optimism as the policy makers are finally realizing that they need to get aid to Greece quickly,” Credit Agricole’s Bhar said. Europe consumes 20 percent of the world’s copper output, and between 15 percent and 25 percent of the other main LME traded metals, excluding tin, according to Barclays Capital. ‘Bit of Comfort’ “There are still concerns overhanging coming from the euro zone, but the FOMC is just helping to give a bit of comfort in these strained times,” Bhar added. Standard & Poor’s yesterday cut Spain’s credit rating to AA from AA+ and said the outlook on the country’s debt is negative. The company also this week lowered Greece’s borrowings to junk and reduced Portugal’s to the third-lowest investment grade. Copper prices more than doubled last year on expectations of a rebound in demand, the Dollar Index fell 4.2 percent and imports into China, the world’s top user, rose to a record in the first half. China’s economy grew at the fastest pace in almost three years in the first quarter, the International Monetary Fund said in a report today. China is forecast to expand 10 percent this year and 9.9 percent in 2011, according to the report. Copper stockpiles tracked by the LME fell for a fourth day, down 0.3 percent to 502,550 tons, the lowest level since Jan. 4. Nickel for three-month delivery on the LME gained 0.1 percent to $25,663 a ton. Prices have gained 38 percent this year, the most among the six main metals traded on the exchange. Aluminum rose 0.6 percent to $2,202 a ton, tin gained 1.9 percent to $18,350 a ton, lead climbed 0.9 percent to $2,257.25 a ton and zinc rose 0.5 percent to $2,342 a ton. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.

Source