LONDON (Reuters) - Copper rose on Friday after briefly hitting a one-week high as data showed China's economy grew at its slowest rate in three years in the second quarter, but maintained a pace that is not expected to undermine fragile global growth.
China's economy grew 7.6 percent in the April-June quarter from a year earlier. The number was in line with market forecasts, however, giving investors some relief even as it left full-year growth on course for its softest showing since 1999.
The world's top copper consumer also released June reports for fixed asset investment and retail sales, both of which slightly exceeded forecasts.
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Three-month copper on the London Metal Exchange rose to $7,666.75 per tonne, its highest since July 6. It was later trading up 1.22 percent at $7,646.50 per tonne by 0906 GMT, on track for a slight 0.6 percent gain for the week.
'I don't think anybody has taken this data positively. Most of the negative risk was already priced, we knew China is slowing down so there is no surprise and (besides) it was better than feared,' said Commerzbank analyst Eugen Weinberg.
Looking forward, he said: 'I think we will bottom out. The future is bright for China. OK Europe is a disaster and U.S. growth has slowed (but) its in the price and central banks (will likely) try counter the trend with more liquidity.'
European Central Bank policymakers held out the possibility on Thursday of taking further measures to boost the flagging euro zone economy after a cut in their deposit rate to zero showed no sign of jolting banks into lending out more money.
Copper came under pressure earlier in the week, however, after minutes from the U.S. Federal Reserve meeting showed the health of the world's biggest economy might need to weaken further before the central bank will launch a new quantitative easing program.
INVESTORS SEEN CAUTIOUS
Overall investors were still expected to stay cautious, even if many market participants expected Beijing would continue introducing more measures to maintain growth, which should help support copper prices.
'I think China should be able to hit 8 percent GDP growth this year although the economy should continue to be weak in the second half of the year,' said Orient Futures derivatives department director Andy Du. Beijing's official full-year target for economic growth is 7.5 percent.
Europe remained a drag on metals markets, however.
Moody's surprised investors earlier by downgrading Italy's government bond rating by two notches to Baa2 and warned it could cut it further, piling on pressure just hours before the euro zone third-largest economy launches its latest bond sale.
Euro zone market strains eased somewhat after Spain unveiled more austerity steps and euro zone finance ministers agreed to grant Madrid the first batch of bailout funds for its troubled banks by the end of July, but pressures could rise after Moody's downgrade.
In other metals traded, soldering metal tin rose 0.95 percent to $18,675 a tonne, while zinc, used in galvanizing rose 1.42 percent to $1,869.25 a tonne.
Zinc producer Nyrstar said late on Thursday it was looking into a A$350 million redevelopment of its Australian Port Pirie smelter into a metals recovery facility to extend its processing capabilities.
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