LONDON, Nov 19 - Copper rose on Friday, extending the previous session's gains, helped by a weaker dollar against the euro as talk of a multi-billion euro deal for Ireland boosted sentiment.
Three-month copper on the London Metal Exchange traded at $8,497 a tonne by 1103 GMT from $8,425 a tonne at the close on Thursday, when it jumped nearly 3 percent. Earlier this week, the metal used in power and construction slumped more than 5 percent in the biggest one-day loss in six months.
"Risk aversion is declining a little for now and that helps commodities in general on a broad basis," Daniel Briesemann, analyst at Commerzbank, said.
"Some consider the latest price drop as excessive and took this as an attractive buying opportunity, and that helps today as well."
Copper hit a record high of $8,966 last week, but euro zone jitters and concerns over tighter Chinese fiscal policy sent investors fleeing from risk.
Worries about Ireland are easing after its central bank chief said he expected Dublin to receive tens of billions of euros in loans from European partners and IMF.
The euro edged up on Friday, recouping earlier losses on expectations that Ireland was near a deal.
In the United States, Federal Reserve Chairman Ben Bernanke hit back at critics of the U.S. central bank's controversial bond-buying programme and issued a thinly veiled attack on China's policy of keeping its currency depressed.
Describing a "two-speed" global recovery, Bernanke said emerging markets were returning to pre-crisis levels of growth while advanced economies were lagging. It is necessary for the more developed economies to maintain accommodative policies to support a durable recovery, he said.
China on Friday said it would raise banks' reserve requirements by 50 basis points, effective Nov. 29, the second time in two weeks.
Chinese markets have tumbled in recent days on concern the government would ratchet up its monetary tightening after inflation sped to a 25-month high in October.
China is the world's top consumer of copper.
"This hike was very much factored in. I don't think it's going to make that much difference to the short term outlook," David Thurtell, analyst at Citi.
CHILE MINE
Sentiment was also lifted after strong U.S. economic data on Thursday bolstered demand prospects for industrial metals.
On the supply side, union workers at Antofagasta Plc's Los Pelambres copper mine signed an early wage deal with management, a union leader told Reuters on Thursday, averting the possibility of a strike at Chile's No. 5 copper deposits.
Meanwhile, union leaders and operators of the world's No.3 copper mine, Chile's Collahuasi, faced off as management sought to break up a two-week strike with a "final" offer while labour action leaders vowed to stay out.
Also aiding overall sentiment has been a trend of falling LME inventories. Latest data showed copper stocks slipped 775 tonnes to 359,825 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.
Among other metals, stainless steel-making ingredient nickel traded at $21,992 a tonne versus $21,850.
Aluminium traded at $2,314 versus $2,305, while battery material lead was at $2,310.50 versus $2,315.
Tin, used in electrical solder, rose to $25,300 a tonne from $25,100 at Thursday's close. Zinc traded at $2,194 versus $2,187 a tonne.
