Copper Gains as U.S. Dollar Drops on Financial System Concerns

By Glenys Sim

Sept. 15 (Bloomberg) -- Copper gained in Asia after the U.S. dollar slipped as the financial industry braced for a Lehman Brothers Holdings Inc. bankruptcy filing after Barclays Plc and Bank of America Corp. abandoned talks to buy it.

Bank of America Corp. meanwhile agreed to buy Merrill Lynch & Co. for about $44 billion, and the Federal Reserve widened the collateral it accepts for loans to Wall Street bond dealers.

``There will be worries about stresses in the U.S. financial system and how this will tie in with economic growth,'' David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, said by phone today. ``Base metals do best when the world economy is strong.''

Copper for delivery in three months climbed 0.4 percent to $7,150 a metric ton on the London Metal Exchange at 10:07 a.m. Singapore time, after falling as much as 1.4 percent earlier.

The Shanghai Futures Exchange is closed today for the Mid- Autumn Festival holiday.

Dollar-denominated metals tend to rise when the dollar falls as they become cheaper for holders of other currencies. The dollar traded at $1.4342 per euro from $1.4224 in New York late last week. It stood at 106.13 yen at 10:03 a.m. in Singapore, from 107.94 last week.

Among other LME-traded metals, aluminum was unchanged at $2,665 a ton, zinc slipped 0.6 percent to $1,875, and nickel was down 1.3 percent at $19,000. Lead and tin had not traded as of 10:06 a.m. in Singapore.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net