Aug 19, 2011 NEW YORK (Dow Jones)--Copper futures rose Friday as traders viewed a weaker dollar as an opportunity to buy after the previous day's slump to one-week lows.

The most actively traded copper contract, for September delivery, rose 1.75 cents, or 0.4%, to $3.9835 a pound on the Comex division of the New York Mercantile Exchange.

The dollar was weaker against other major currencies Friday, luring some cautious buying back to the downtrodden copper market. Copper prices have wobbled around the $4 level since a 12% correction at the start of August, and some investors returned to the market Friday as the weaker greenback made the futures cheaper for buyers using other currencies.

The ICE U.S. Dollar Index, which tracks the currency against those of some major U.S. trading partners, was at 73.877 at the close of Comex floor trading, down from 74.244 late Thursday in New York.

Another glimmer of hope came from weekly Shanghai Futures Exchange copper inventory data, which showed its first decline in four weeks. Copper inventories fell 8,805 tons to 112,014 tons Friday.

China is the world's largest copper consumer and a driver of global prices. Despite expectations for steady demand there, analysts have sounded a cautious tone on the outlook for copper as the U.S. and European economies showed signs of slowing.

Futures took a steep tumble from near $4.50 a pound at the beginning of the month, to below $3.90 a pound last week, as signs of a renewed economic slowdown rattled investor confidence in perceived risky assets such as commodities and equities.

Copper is widely viewed as an industrial bellwether because of its widespread uses in construction and manufacturing.

"As long as talk of a global recession is in the cards it's very hard to be bullish copper," said Adam Klopfenstein, senior market strategist with MF Global.

Bank of America-Merrill Lynch warned this week that base metals could see further losses in the coming months. Additionally, commodity analysts with Deutsche Bank recommended in a note Friday that in the event of further disappointing U.S. economic data, clients should bet on declines in copper and gains in aluminum.

Aluminum demand has been underpinned by financing deals, as traders buy metal and store it, while at the same time locking in a higher price for delivery at a later date.

The same opportunity doesn't hold for copper, as prices for delivery of the metal in 2012 and 2013 are not high enough to justify the costs of long-term storage.

Copper settlements (ranges include electronic and pit trading):
Aug $3.9825; up 1.80 cents; Range $3.9645-$3.9875
Sep $3.9835; up 1.75 cents; Range $3.9255-$4.0145