* Dollar falls against basket of currencies * Indonesia plans export tax on range of commodities * Coming up: U.S. core CPI, Nov, 1330 GMT By Susan Thomas LONDON, Dec 16 (Reuters) - Copper rose on Friday, paring losses for the week, on a retreating dollar and firm U.S. economic data, but gains looked vulnerable with Europe's debt crisis and its impact on metals demand still a big worry. Industrial metals have fallen this year as Europe's problems stunt economic growth, sap banks' lending for commodity trading and threaten to dampen demand for goods exported by emerging nations. Three-month copper on the London Metal Exchange rose 1.6 percent to $7,330 a tonne by 1026 GMT, trimming losses for the week to 6.1 percent. Metals have been getting some support from a steadier tone in wider markets, and a halt in the slide of the euro against the dollar, said head of trading Steve Hardcastle of Sucden Financial. "The funds have been running a little bit short, so to that extent if we are seeing end of year book squaring then it might be a bit more supportive than feared. I think the market is going to run quietly into Christmas," Hardcastle said. Copper is still headed for its biggest weekly loss since the end of September and the first annual decline in three years. "In the current environment we would argue that it is still too early to buy industrial metals," Credit Suisse said in a note. "However, yesterday's economic data already gave a hint that fortunes could turn more positive for industrial metals in 2012." Surprising resilience in the U.S. economy and corporate sector underpinned investor appetite for risky assets into the year end, although trading is thinning out ahead of a holiday season. U.S. jobless claims on Thursday fell to a 3-1/2-year low and a survey showed New York factories picked up speed this month. "As of now, these factors are still in the backseat given the liquidity stress. However at one point in 2012, we think industrial metals could start to recover significantly," Credit Suisse said. TURBULENT Possible cuts in the credit ratings of euro zone countries are looming after a key European Union summit last week offered little respite to turbulent euro zone bond markets and cash-starved European banks. Europe's top central banker said that euro zone governments are on the right track to restore market confidence but reminded them that an emergency programme to buy their bonds was "neither eternal nor infinite". The volatility the crisis has caused has led to losses at brokers and banks. Credit Agricole this week said it will stop trading commodities and slash its financing of the multi-billion-dollar commodities trade as the euro zone crisis worsens. The dollar fell against a basket of currencies, as the euro steadied. A weaker dollar makes metals priced in the U.S. unit less expensive for holders of other currencies. Price gains may be capped as production at mines resumes following labour disputes. Freeport McMoRan Copper & Gold Inc expects full operations at its Indonesia mine to start by early 2012 after reaching a pay deal on Wednesday to end a three-month strike that paralysed output at the world's second-biggest copper deposit. But warehouse inventories of copper are rising. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 9.4 percent from a week earlier, while stocks in warehouses monitored by the LME fell 825 tonnes to 381,250 tonnes, representing around a week's worth of global consumption. Also, Japanese copper wire and cable shipments fell 0.4 percent in November from a year earlier to an estimated 60,400 tonnes, marking the second-lowest level for that month in the past 35 years, an industry body said on Friday. Japan's appetite for copper, often seen as a gauge of economic activity and already weak in the wake of the global financial crisis, took a fresh beating after the March earthquake prompted user industries to reduce domestic production. Indonesia, a major global producer of raw materials, plans to impose export taxes on a range of commodities, including metals and rubber, as part of a raft of new fiscal policies for next year, the industry minister said on Friday. Three-month tin was flat at 18,600 per tonne. Aluminium was up 1.3 percent at $2,000 from $1,975, zinc was up 1.5 percent at $1,873 from $1,844.5, lead was up 1 percent at $1,995 from $1,875, and nickel was almost flat at $17,900 from $17,895. Metal Prices at 1020 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 331.65 5.35 +1.64 444.70 -25.42 LME Alum 2000.00 25.00 +1.27 2470.00 -19.03 LME Cu 7330.00 119.00 +1.65 9600.00 -23.65 LME Lead 1992.25 17.25 +0.87 2550.00 -21.87 LME Nickel 17880.00 -15.00 -0.08 24750.00 -27.76 LME Tin 18600.00 0.00 +0.00 26900.00 -30.86 LME Zinc 1872.00 27.50 +1.49 2454.00 -23.72 SHFE Alu 15835.00 190.00 +1.21 16840.00 -5.97 SHFE Cu* 54300.00 1250.00 +2.36 71850.00 -24.43 SHFE Zin 14950.00 235.00 +1.60 19475.00 -23.23 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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