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METALS-Copper set for third straight weekly rise after Fed policy shift

(Updates prices)

Aug 28 (Reuters) - Copper prices in London were on track for their third straight week of gains on Friday, after traders interpreted a policy shift by the U.S. Federal Reserve as implying a weaker dollar and cheaper dollar-denominated prices.

Three-month copper on the London Metal Exchange advanced 0.8% to $6,675.50 a tonne by 0719 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange rose 0.9% to 51,990 yuan ($7,570.11) a tonne.

The Fed introduced a new monetary policy on Thursday likely to keep interest rates low and pressure the dollar, which has been hovering near a two-year low.

“The comments from Federal Reserve Chair Powell will keep prices supported, as low interest rates for longer will push the U.S. dollar lower,” said commodities broker Anna Stablum of Marex Spectron.

“Still, sentiment is a bit fragile due to heightened tensions in relation to the South China Sea.”

China’s foreign ministry said on Thursday it was unjust for the United States to impose sanctions on Chinese companies involved in construction in the South China Sea.

Stablum also said few LME investors were willing to put in new positions on the last day of the month ahead of a long weekend.

The LME is closed for a public holiday on Aug. 31.

FUNDAMENTALS

* Freeport-McMoran Inc’s Indonesian unit would ease a lockdown at its Grasberg mine after a protest by workers over movements disrupted operations.

* Activities at Indonesia’s Weda Bay smelter complex, one of the country’s main nickel processing hubs, resumed on Thursday after floods halted operations earlier this week.

* LME lead rose 1.1% to $2,004 a tonne, while zinc rose 1.7% to $2,528 a tonne. In Shanghai, nickel rose 0.6% to 120,350 yuan a tonne and zinc advanced 1.1% to 20,060 yuan a tonne.

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$1 = 6.8678 yuan Reporting by Mai Nguyen; Editing by Amy Caren Daniel and David Evans

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