Copper pares losses as tight supply offsets Fed rate-hike bets

London copper pared earlier losses on Monday to hold onto gains from a 10-week winning streak, as a dip in the U.S. dollar and tight availability outside the U.S. offset pressure from stronger-than-expected jobs data that lifted expectations for a Federal Reserve rate hike. Three-month copper on the London Metal Exchange rose 0.07% to $14,426 a metric ton by 0717 GMT, after falling as much as 0.4% earlier this session. The most-traded October copper contract on the Shanghai Futures Exchange closed 0.27% higher at 109,410 yuan ($16,303.33) a ton. U.S. nonfarm payrolls increased by 162,000 in August, well above economists' expectations for a gain of 56,000, strengthening expectations that the Federal Reserve could raise interest rates at its September meeting. The dollar dipped, failing to sustain a brief rise following Friday's jobs report despite increased expectations for a Fed hike. A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies. Stronger jobs data and frequently shifting rate expectations have kept copper prices choppy, Galaxy Futures said. Concerns over another LME short squeeze have eased as the COMEX-LME price gap narrowed to just above $300 a ton and the share of cancelled LME warrants declined, although the continued pull of metal into the U.S. could tighten available stocks again and leave short-position holders struggling to source metal for delivery, the broker added. Copper completed its 10th consecutive weekly gain on Friday, supported by thinning inventories outside the United States as metal continued to flow into the U.S. ahead of possible import tariffs. Among other LME metals, aluminium rose 0.12%, zinc gained 0.75% and lead advanced 0.37%, while nickel fell 0.36%. Tin edged up 0.09%. On the SHFE, aluminium rose 0.18%, zinc jumped 1.31%, lead gained 0.59% and tin added 0.15%, while nickel fell 0.17%.