NEW YORK/LONDON, July 2 (Reuters) - Copper bounced on Friday, as the dollar fell against a basket of major currencies and investors digested key employment data in the United States.
Copper for September delivery HGU0 on the COMEX metals division of the New York Mercantile Exchange ended up 3.90 cents, or nearly 1.4 percent, at $2.9160 per lb, after dealing between $2.8945 and $2.9580.
On the London Metal Exchange, benchmark copper CMCU3 was untraded at the close but last bid at $6,410 a tonne from $6,335 at the close on Thursday.
Copper found support from the dollar, which slipped against the euro after data showed a larger-than-expected drop in U.S. June nonfarm payrolls to 125,000, while the unemployment rate unexpectedly fell to 9.5 percent.
Donald Selkin, chief market strategist with National Securities Corp. in New York, said the increase in private hiring gave a slightly positive tone to the report, despite all of the negativity surrounding the headline number.
"I thought it was decent, relative to expectations ... the fact that the 13,000 was out there and we came in at 83,000 in the private, to me was OK", he said, referring to the ADP Employer Services report on Thursday.
Still, recovery sentiment remained fragile, as highlighted by below-consensus manufacturing surveys this week in the United States and China, the world's top two consumers of copper.
Furthermore, euro zone manufacturing slowed in June to its weakest growth rate in four months, but was unrevised from a survey estimate just over a week ago.
"Everyone knew things were slowing down a bit," said Alex Heath, head of base metals at RBC Capital Markets. "With cutbacks and austerity measures imposed, nobody should be terribly surprised to see GDP shrinking or PMI slowing down.
On the other hand the numbers are still good in China."
Also weighing on metals was news Australia ended a damaging dispute with global miners by dumping its "super profits" tax for a lower resources rent tax backed by key global miners.
As a result Swiss-based Xstrata (XTA.L) reinstated about A$600 million of copper mining and exploration projects in Australia.
Meanwhile, stocks in LME warehouses continued to fall. <0#LME-STOCKS> Copper stocks dropped 2,125 tonnes to 447,300 tonnes, the lowest since early December last year, and aluminum stocks shed 5,150 tonnes to 4.2 million tonnes, about 220,000 tonnes below the record high of 4.64 million tonnes set in January.
Three-month aluminum CMAL3 closed up $16 at $1,942 a tonne. Zinc MZN3 was untraded at the close, but last bid at $1,775 a tonne from $1,743 on Thursday.
Earlier, the metal used to galvanize steel, jumped more than 4 percent to $1,820. Galvanized steel producers are estimated to account for more than 50 percent of global zinc demand, forecast at around 12 million tonnes this year.
Lead CMPB3 rose $18 to end at $1,753 a tonne, tin CMSN3 gained $280 at $17,240, while nickel CMNI3 shed $200 to $18,800.