RTRS:METALS-Copper hits week high as Fed expected to keep stimulus
* Fed's bond buying seen extending to March
* China may increase term bookings of copper imports in '14
* Coming up: U.S. CPI for Sept at 1230 GMT
By Harpreet Bhal
LONDON, Oct 30 (Reuters) - Copper rose to its highest level in a week on Wednesday, boosted by expectations the U.S. Federal Reserve will maintain its stimulus programme for longer to aid a recovery in the world's largest economy.
Benchmark copper on the London Metal Exchange was up nearly 1 percent at $7,269 a tonne at 1022 GMT, after earlier touching $7,280 a tonne, its highest since Oct. 23.
LME aluminium was up around 0.5 percent after reaching a session high of $1,898 a tonne, close to last session's two-month high of $1,905.75.
The Fed is expected to preserve its massive bond-buying campaign when it concludes a two-day meeting later in the day and may point to softer readings on the U.S. economy to signal that the policy will be extended into 2014.
"During the last meeting, it was clearly priced in that the Fed will trigger their button on tapering, but they did the opposite, and hence we have seen this tremendous rally for copper," Naeem Aslam, chief market analyst at Ava Trade, said.
"If the Fed keeps the patient on tapering medicine for longer, this could be good news for copper, and we could see the metal breaking its resistance of $7,334."
Ultra-loose monetary policy around the world in the past few years has drawn investors to commodities as an alternative to interest-bearing assets.
"Continued availability of liquidity would likely mean more funds for investment in metals, and low interest rates makes financing through metals an attractive option," said Joyce Liu, an investment analyst at Phillip Futures Singapore.
In the euro zone, data signalled the recovery in Europe was strengthening. Confidence in the region's economy improved more than expected in October, driven by more optimism in industry, while the business climate indicator rallied to an 18-month high.
In a bright spot for the demand outlook, Chinese firms may increase term bookings of refined copper imports in 2014, despite a forecast jump in premiums, because they are becoming more confident on the economic outlook and demand for copper as a financing tool remains strong.
China is the world's largest copper consumer, accounting for around 40 percent of global refined demand.
State-backed research firm Antaike said China's consumption of refined copper would grow more quickly in 2014, though not fast enough to boost imports significantly as its production increases at an even faster pace.
In aluminium, Chinese output is likely to hit a record 24 million tonnes this year, a research director at the country's top producer of the metal said, suggesting production may ramp up towards year-end.
