By Anna Stablum Nov. 4 (Bloomberg) -- Copper rose for a second day in New York as the dollar weakened before Federal Reserve officials end a meeting at which they’ll probably keep interest rates near zero. Fed officials may indicate their $1 trillion injection into the economy is helping to revive growth without requiring higher borrowing costs, according to economists. The Dollar Index, a six-currency gauge of the greenback’s performance, fell as much as 0.5 percent. Declines by the dollar make metals priced in the currency cheaper for holders of other monies. “There are expectations of a weaker dollar,” said David Wilson, a Societe Generale SA analyst in London. “The big thing to watch is the outcome of the Fed meeting.” December-delivery copper gained 5.65 cents, or 1.9 percent, to $3.0125 a pound on the New York Mercantile Exchange’s Comex unit at 8:45 a.m. local time. Copper for three-month delivery rose 2.4 percent to $6,615 a metric ton on the London Metal Exchange. The Federal Open Market Committee will release a statement at around 2:15 p.m. in Washington. Fed Chairman Ben S. Bernanke and his colleagues are reluctant to raise rates until the labor market shows signs of recovery, even though a report last week showed the economy resumed growth after shrinking for 12 months. Service Industries A report probably will show that service industries in the U.S. expanded for a second month in October, underpinning optimism the economy is recovering. The Institute for Supply Management’s index of non-manufacturing businesses rose to 51.5, the highest level since April 2008, according to the median forecast of 77 economists surveyed by Bloomberg News. “If we begin to see the service sector pick up, that will be positive for sentiment,” Societe Generale’s Wilson said. “It will be further confirmation the economy is improving.” Companies in the U.S. cut an estimated 203,000 jobs last month, below a revised 227,000 decline the prior month, data from ADP Employer Services showed today. Copper may rebound to $4 a pound ($8,818 a ton) next year on recovering U.S. and European economies and a lack of new supply, according to Oscar Gonzalez Rocha, Southern Copper Corp.’s chief executive officer. “By next year, the American economy and most of Europe will have recovered from the crisis and consumption will be up,” he said yesterday in an interview. Southern Copper is the biggest producer of the metal in Peru and Mexico. Chinese Economy Copper has more than doubled this year, helped by record first-half imports into China as well as the dollar index’s 6.5 percent drop. The World Bank raised its forecast for economic growth in the country, the world’s biggest copper user. China’s economy will expand 8.4 percent this year, the World Bank said, above its prior 7.2 percent forecast. Growth next year will be 8.7 percent, the bank said, more than an earlier estimate of 7.7 percent. Among other LME metals for three-month delivery, aluminum rose 1.3 percent at $1,932 a ton, zinc gained 2.5 percent to $2,235 a ton, and lead advanced 3.3 percent to $2,344 a ton. Tin rose 0.9 percent to $14,925 a ton, and nickel climbed 2.8 percent to $18,300 a ton.

Source