* Tight credit conditions in China restrain purchases * China domestic copper premiums hits near 3-year peak * U.S. Fed meeting, jobs data on Friday in focus (Recasts, adds comment, changes dateline) By Susan Thomas and Melanie Burton LONDON/SYDNEY, April 29 (Reuters) - Copper rose on Tuesday to a near two-month high on tight supplies of the metal in top consumer China and as investors awaited data and economic policy announcements from the United States. But trading was quiet ahead of holidays in Asia this week and next Monday in Britain, home of the London Metal Exchange (LME), the world's largest metals marketplace. Copper prices have risen nearly 2 percent so far in April, helped by tight credit conditions in China that have restricted some copper consumers' access to bonded stocks in Shanghai. "The risks are laid to the upside for the copper price because of what the local premium is reflecting, which is likely a tightness in supply at a time when demand is quite strong," said Morgan Stanley analyst Joel Crane in Melbourne. Three-month copper on the London Metal Exchange was up 0.2 percent at $6,759 a tonne by 0945 GMT from $6,745 at the close on Monday. Its intraday high of $6,798 a tonne on Monday was its loftiest level since March 7. The most-traded July copper contract on the Shanghai Futures Exchange slipped by 0.6 percent to 47,640 yuan ($7,600)a tonne. Reflecting a shortfall of physical copper in China's domestic market, onshore copper premiums surged 1,900 yuan above the front month ShFE contract on Monday, the highest since April 2009. Investors are now eyeing this week's U.S. jobs report and a Federal Reserve policy meeting to gauge further the strength of the world's largest economy and the central bank's stance on tightening monetary policy. "Another ... tapering announcement could be bullish for the dollar but bearish for copper," Naeem Aslam, chief market analyst at Ava Trade in Dublin, said. A stronger dollar makes commodities priced in the U.S. currency more expensive for holders of other currencies and typically puts pressure on prices. "But it is important not to underestimate the fact that the Fed are only tapering because they believe the economy is becoming stronger and this is a positive influence for copper in the long run," Aslam added. This argument, he said, would be cemented if U.S. payroll data due on Friday beats market expectations. Copper is used extensively in construction and wiring, and an improving economy could mean more building. Meanwhile, momentum for nickel, the top performer in the base metals complex, slowed a little as investors started taking profits after gains of more than 30 percent since an Indonesian ban on unprocessed ore exports in January. LME benchmark nickel was up 0.7 percent at $18,305 per tonne from $18,175 at the close on Monday. It hit an intraday peak of $18,715 on Monday, its highest level in almost 15 months, but some analysts say prices will struggle to go much higher. Nickel has also lost steam after the latest list of Russian companies targeted for sanctions by the United States did not include metals companies such as top refined nickel producer Norilsk Nickel. Senior U.S. Republican lawmakers said on Monday the sanctions imposed on Russian individuals and companies were too mild to deter Moscow from further action in Ukraine and promised to offer legislation as soon as this week to pressure the Obama administration to take stronger action.

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