* Euro builds on gains, hits 3-week high vs dlr * China's factory activity slows * Coming up: US manufacturing data-1400 GMT, auto sales By Susan Thomas LONDON, July 1 (Reuters) - Copper rose on Friday on a weaker dollar as risk sentiment improved on prospects of better U.S. economic and auto data later in the day, but reports showing China's factory activity had slowed capped the rise. Three-month copper on the London Metal Exchange was up 0.3 percent at $9,455 a tonne by 0955 GMT, after rallying to its highest in two months on Thursday after Greece rubber-stamped an austerity plan to save the country from bankruptcy. "The Greek vote was broadly positive for base metals," said Nick Moore, global head of commodity strategy at RBS Global Banking and Markets. "July and August are the weakest months for base metals," he added, "I expect them to be somewhat firmer due to the catch-up after the Japanese come back up to speed, but it's early days and we know we are fighting headwinds." China's official Purchasing Managers' Index (PMI) for June fell to 50.9 from 52 in May, the China Federation of Logistics and Purchasing said on Friday. This was less than the 51.3 expected by the market. HSBC's China PMI for June also dipped from 51.6 to 50.1, the lowest in 11 months. "The lower-than-expected China PMI is definitely one of the factors that has caused some players to pare back bullish bets on copper, especially after the huge rally over the past three days," said Phillip Futures analyst Ong Yiling. But a weaker dollar, which makes commodities cheaper for holders of other currencies, lent support to metals. The euro hit a three-week high against the U.S. currency, lifted by better risk sentiment as investors shifted their focus from the euro zone's sovereign debt troubles to forthcoming U.S. economic data. Analysts said the euro could gain more ground if the U.S. ISM manufacturing report surprises on the upside. Risk appetite was boosted on Thursday after data showed factory activity in the U.S. Midwest accelerated in June, fostering hopes of a pick-up in economic growth. AUTO SALES Base metals investors are also looking to U.S. auto sales for June, which are seen rising 2 percent from May and a healthier 8 percent year-on-year. Aluminium, used widely in car-making, could benefit in particular if the figures are positive. Prices have also taken support from data showing that inventories of the metal in LME warehouses had fallen nearly 16,000 tonnes, the latest data showed. "We've got an all-time record drawdown in June of combined LME and Shanghai aluminium inventories," Moore said. "That's very supportive for the aluminium story, particularly as we look ahead with the auto manufacturers deciding to work through the summer to make up for lost production." Tin was $26,000 from $26,050 at Thursday's close, while zinc was $2,375.5 from $2,365. Lead was at $2,665 from $2,684 and aluminium was at $2,533 from $2,532. Nickel was $23,445 from $23,425. Metal Prices at 1000 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 429.10 1.40 +0.33 444.70 -3.51 LME Alum 2527.00 -5.00 -0.20 2470.00 2.31 LME Cu 9395.00 -35.00 -0.37 9600.00 -2.14 LME Lead 2665.00 -19.00 -0.71 2550.00 4.51 LME Nickel 23425.00 0.00 +0.00 24750.00 -5.35 LME Tin 25900.00 -150.00 -0.58 26900.00 -3.72 LME Zinc 2345.00 -20.00 -0.85 2454.00 -4.44 SHFE Alu 17265.00 85.00 +0.49 16840.00 2.52 SHFE Cu* 69880.00 20.00 +0.03 71850.00 -2.74 SHFE Zin 17810.00 50.00 +0.28 19475.00 -8.55 ** 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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