June 28, 2016 / 3:13 AM / in 4 years

METALS-London copper floats near eight-week high, Brexit nerves persist

* ShFE copper breaks above 200-day moving average

* China yuan commitment helps to shore up ShFE copper

* Coming up: U.S. GDP final Q1 at 1230 GMT (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, June 28 (Reuters) - London copper flirted with a fresh eight-week high on Tuesday as the dollar slipped and markets continued to assess the implications of Britain’s vote to exit the European Union.

The result of Britain’s vote last Thursday continued to reverberate through financial markets, with the pound falling to its lowest in 31 years, despite government attempts to calm fears about the political and economic fallout.

The dollar slid back to lows seen on Monday, which fuelled an advance in metals, which have proven more resilient in recent days. Copper fell nearly 5 percent at one point on Friday.

“The impact of the Brexit vote result on base metals has been relatively short-lived ... From a fundamental perspective, the relatively small effect on global GDP from Brexit means the impact on demand trends is likely to be limited,” Standard Chartered said in a research note.

“We think copper is likely to continue to outperform (on a relative basis) in the short term as investors square positions in a risk-off environment, as has already been the case over the past week.”

Speculators on the Comex copper market took out a record short position earlier this month on expectations of mounting supply and a seasonal demand slowdown in the northern hemisphere.

Three-month copper on the London Metal Exchange rebounded by 1.5 percent to $4,779 a tonne by 0725 GMT. It earlier rose to as high as $4,790, close to last week’s high of $4,795, which was its strongest since May 6.

Copper’s trading band is narrowing to $4,580-$4,790, with a ceiling at the 200-day moving average, with a break out expected near term.

Shanghai Futures Exchange copper jumped by 2.2 percent to 37,190 yuan ($5,592) a tonne, as technical momentum ignited once it broke through the 200-DMA earlier in the session.

Copper has found support as Chinese buyers emerged following news that regulators there would support the yuan, said ANZ in a note.

China’s debt and financial risks were under control, the central bank said on Monday, adding that it would continue to implement prudent monetary policy and proactive fiscal policy.

But growth in China’s manufacturing sector likely stalled in June, a Reuters poll showed, adding to expectations that Beijing will have to roll out more stimulus to boost the sluggish economy. Manufacturing data is due on Friday.

In news that may offer support to copper, which is used in powering renewable energy, President Barack Obama, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto are this week expected to agree that their countries will aim to produce 50 percent of their power from clean energy sources by 2025.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin ($1 = 6.6483 Chinese yuan renminbi) ($1 = 6.6509 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Ed Davies, Joseph Radford and Kim Coghill)

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