METALS-Copper pares gains as US inflation data boosts dollar

(Updates prices as of 1704 GMT) By Polina Devitt LONDON, Feb 13 (Reuters) - Copper prices pared early gains on Tuesday as the dollar strengthened after U.S. inflation data reinforced bets that the Federal Reserve would keep interest rates unchanged in March. Three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.1% at $8,244 a metric ton by 1704 GMT. The metal hit a three-month low of $8,127 on Feb. 9 and fell 3.7% last week. The dollar index =USD was up 0.6% after the inflation data, with traders raising bets that Fed policymakers would wait until June before cutting interest rates. A stronger U.S. currency makes dollar-priced metals more expensive for buyers with other currencies. "If U.S. rates stay higher for longer, this would lead to a stronger U.S. dollar and weaker investor sentiment, which would translate to lower metals prices," said ING commodities strategist Ewa Manthey. Copper, widely used in power and construction, is down 4% this month on concerns about demand from top consumer China and its property sector in particular, though activity is muted this week as China celebrates the Lunar New Year. On the technical front, copper failed to break through resistance from its 100-day moving average at $8,294. Providing some support, LME daily data showed that copper stocks in LME-registered warehouses MCUSTX-TOTAL hit the lowest level since September after 850 tons of outflows. Meanwhile, lead stocks rose further to a six-year high while zinc stocks climbed to their highest in two and a half years. LME aluminium CMAL3 slipped 0.2% to $2,222.5 a ton, zinc CMZN3 fell 0.6% to $2,306.5, lead CMPB3 lost 1.3% to $1,997.5, tin CMSN3 was up 1% at $27,580 and nickel CMNI3 gained 1.4% to $16,270. (Reporting by Polina Devitt in London Additional reporting by Neha Arora Editing by David Goodman) (([email protected]; Reuters Messaging: [email protected])) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))