* Euro rises vs dollar after ECB 3-year funding * Cancelled warrants seen in Vlissingen aluminium stocks * COMING UP: U.S. home sales for Nov at 1500 GMT By Harpreet Bhal LONDON, Dec 21 (Reuters) - Copper prices rose to their highest levels in more than a week on Wednesday on an upbeat outlook for the U.S. economy and an encouraging take-up by banks from the European Central Bank's lending operation aimed at easing the threat of a credit crunch. Benchmark copper on the London Metal Exchange (LME) traded at $7,486 a tonne at 1100 GMT, from a close of $7,260 on Tuesday. The metal used in power and construction earlier hit its highest level in more than a week at $7,573 a tonne. The euro rose against the dollar after banks took a huge 489 billion euros at the ECB's first ever offering of 3-year funding, providing hope a credit crunch can be avoided and that the money may be used to buy Italian and Spanish debt. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies. Upbeat economic data from the United States also helped reinforce hopes of an economic recovery and demand for industrial metals. "We had some really positive U.S. housing data out yesterday which underpins what has been some really good data for the U.S. over the past few months and showing that even with all the problems in Europe, U.S. growth momentum seems to be picking up pace," said Gayle Berry, analyst at Barcap. Sentiment was also helped by data showing China's refined copper imports jumped by nearly half on the year in November to reach the second-highest on record, as an open arbitrage between London and Shanghai bolstered a trend of increased imports for financing. "What's given it (the metals market) fuel is the Chinese trade data, which, although we got a taster for it earlier in the month... I think it's still helped to buoy sentiment," Berry said. CAUTION REMAINS Copper prices have shed nearly one quarter of their value since the start of the year, on track for its first annual decline since 2008, as a deepening euro zone debt crisis has pushed investors to liquidate assets such as industrial metals. Analysts warned sentiment could remain fragile towards the end of the year in the face of persistent caution about the euro zone crisis. "Some base metals were already seeking to consolidate after heavy losses recently, but macro pressure remained largely intact with the broader market still dissatisfied with policymakers' efforts at tackling the debt crisis in the eurozone," VTB analyst Andrey Kryuchenkov said in a note. In other metals, aluminium climbed to $2,007.75 a tonne from a close of $1,962 a tonne on Tuesday. Aluminium stocks in LME warehouses rose by 30,925 tonnes, with cancelled warrants registered for the first time in Vlissingen, amounting to 145,000 tonnes, or 15.97 percent of its stocks. "Fundamentally, despite all the warehousing plays on the LME and short periods of spot premium spikes, there is little positivity here, at least in the medium term, with supply still outpacing demand," Kryuchenkov said. "Overall, aluminium is unlikely to make much progress here in dull macro trading before the end of the year, with the market seeking to consolidate near almost 17-month lows." Zinc, used in galvanising, rose to $1,882 from a close of $1,838, while tin rose to $19,300 from $18,695. Battery material lead was at $1,975.25 from $1,937 and stainless steel ingredient nickel was at $18,820 from $18,380. Metal Prices at 1103 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 341.75 5.30 +1.58 444.70 -23.15 LME Alum 2000.25 -1.75 -0.09 2470.00 -19.02 LME Cu 7480.50 70.50 +0.95 9600.00 -22.08 LME Lead 1968.50 9.50 +0.48 2550.00 -22.80 LME Nickel 18706.00 -159.00 -0.84 24750.00 -24.42 LME Tin 19101.00 406.00 +2.17 26900.00 -28.99 LME Zinc 1876.75 38.75 +2.11 2454.00 -23.52 SHFE Alu 15835.00 85.00 +0.54 16840.00 -5.97 SHFE Cu* 54620.00 880.00 +1.64 71850.00 -23.98 SHFE Zin 14900.00 120.00 +0.81 19475.00 -23.49 ** 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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