March 3 (Bloomberg) -- Copper prices rose for a fourth straight session as the dollar declined, enhancing the appeal of commodities as an alternative investment.
The U.S. currency dropped as much as 0.9 percent against the euro as Greece took steps to reduce its fiscal deficit, spurring speculation that the nation can tame the European Union's biggest budget gap. U.S. equity indexes and commodities including crude oil and precious metals also gained.
Copper rose on the "continued weakness of the dollar and strength of the euro on expectations of a resolution in Greece," said Frank McGhee, Integrated Brokerage Services LLC's head dealer in Chicago. "It's the usual suspects. The euro, crude and stocks are in a dancing game, and precious metals and silver are taking us higher. Copper is going along."
Copper futures for May delivery advanced 2.35 cents, or 0.7 percent, to $3.435 a pound on the New York Mercantile Exchange's Comex unit. The most-active contract gained 6.3 percent in the previous three sessions, partly on speculation that an earthquake in Chile would disrupt mining.
In Greece, Prime Minister George Papandreou's government passed additional budget cuts to slice 4.8 billion euros ($6.6 billion) from the deficit. Papandreou is preparing to meet Chancellor Angela Merkel of Germany on March 5 and President Nicolas Sarkozy of France on March 7 to discuss Greece's finances.
Rising budget deficits in euro-zone member states including Greece, Spain and Portugal have helped to weaken the euro, driving up demand for alternative assets. Before today, the 16- nation currency slid 4.9 percent against the dollar this year.
Copper also rose as bookings to deliver the metal from inventories in warehouses monitored by the London Metal Exchange, called canceled warrants, jumped 21 percent today and have climbed 85 percent this week.
Stockpiles tallied by the LME fell 0.3 percent to 550,575 metric tons today, the first decline this week. Lower inventories and rising bookings signal increased demand, supporting prices, said Alex Heath, the head of industrial- metals trading at RBC Capital Markets in London.
"People are looking at the first signs of an economic recovery," he said.
Service industries in the U.S., which account for almost 90 percent of all economic activity in the world's largest economy, expanded last month at the fastest pace since October 2007, according to the Institute for Supply Management. The group's index of non-manufacturing businesses rose to 53 from 50.5 in January. Readings above 50 indicate growth.
In Chile, the world's biggest copper producer, the magnitude 8.8 earthquake that struck on Feb. 27 did little damage to most mines, according to company and industry reports. The temblor spurred a rally in copper.
Gains in the metal driven by events in Chile were short- lived, and the market has returned to focus on broader financial issues, including the strength of the euro and dollar, according to Andrey Kryuchenkov, a VTB Capital Plc analyst in London.
On the LME, copper for three-month delivery jumped $89, or 1.2 percent, to $7,580 a metric ton ($3.44 a pound). Nickel, zinc, aluminum, tin and lead also rose.