LONDON: Copper fell on Tuesday as the dollar strengthened and on concerns that Spain's banking crisis could deepen the euro zone's debt problems, but prospects of economic stimulus in big metals consumer China limited losses. Benchmark copper on the London Metal Exchange closed at $7,670 a tonne versus $7,689 at the close on Monday. It hit a session of $7,651 on Tuesday, and is down more than 8 percent in May, heading for a third month of losses. The euro slid versus the dollar to its lowest in nearly two years late in Europe on Tuesday, after Egan-Jones downgraded Spain's sovereign rating, citing its weak banking sector. The dollar also strengthened against a basket of currencies. A stronger dollar makes commodities priced in the currency more expensive for holders of other currencies. Speculation that China may soon unveil more spending measures to support flagging growth helped support copper, used widely in construction. The official Shanghai Securities News reported on Tuesday, citing unidentified sources, that China's biggest banks appeared to have accelerated lending toward the end of this month as Beijing starts to fast-track its approval of infrastructure investments in an effort to stem sagging growth. "I think the sense that China might do something is being supportive of metals," Citi analyst David Wilson said. "But nervousness is still the dominant feature. Spain is making people nervous, and markets are waiting to see what on earth happens with the elections in Greece." Polls in Greece showed the conservative New Democracy party, which backs the country's international bailout, has a lead over the leftist SYRIZA party, which opposes it ahead of a June 17 election. In Ireland, voters appear poised to reluctantly approve the EU fiscal treaty on Thursday. MONTH END "Copper is supported by a weaker dollar and some month-end repositioning. Hedge funds will continue to sell on the increases," said T-Commodity consultant Gianclaudio Torlizzi. "Fundamentals are not bad but the macro picture is worrying. People haven't priced in the European situation yet." The European Commission will set out its economic strategy for the euro zone on Wednesday, spelling out measures to balance growth with unpopular fiscal consolidation that will be particularly pointed for Spain and Italy. In the United States, home prices edged higher for the second month in a row in March as the housing recovery picked up traction, while gains in some of the hardest hit areas suggested the improvement was becoming more broad based. But consumer confidence unexpectedly cooled in May, falling to the lowest level in four months as Americans became more pessimistic about the job market and economic outlook. Tin closed at $20,200 per tonne from $19,795 while zinc ended at $1,914 from $1,910 at Monday's close, and lead at $1,948 from $1,941.50. Aluminium, untraded at the close, was bid at $2,016 from $2,022. Nickel closed at $16,650 from $17,000. Earlier, nickel fell to $16,538, its lowest since 2009. A London trader said nickel fell because "the market has been precariously balanced recently between those who believe it cannot go lower than 17,000 because of supply problems and those who believe it will go to $15,000 because of demand problems". "That news of Spain being downgraded and the effect on the euro was the catalyst for the shorts to win, for now," the trader said.

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