* Obama wins backing from key figures for Syria strike
* Dollar hovers near six week high versus currency basket
* Coming up: US mortgage market index at 1100 GMT
By Maytaal Angel
LONDON, Sept 4 (Reuters) - Copper fell nearly 1 percent on
Wednesday as encouraging U.S. economic data reinforced prospects
for the Federal Reserve to start stimulus tapering, while
investors remained cautious as a potential U.S. strike on Syria
looked more likely.
Falls were limited, however, by improved prospects for
global growth after a string of upbeat factory activity reports
led by top consumer China and the United States.
"All financial markets are reacting to what's going on in
the Middle East, but for copper what's more important is the
fact that China is growing at a fairly solid pace," said Karim
Cherif, commodities analyst at Credit Suisse.
He added, however: "(Overall) the situation is not
particularly positive. There's going to be a surplus this year
and in the next few years. We expect the market to remain in the
$7,000-7,300 a tonne range over the next 12 months."
Benchmark three-month copper on the London Metal Exchange
fell 0.92 percent to $7,178 a tonne by 0926 GMT. Copper
prices are consolidating after falling to three-week lows of
$7,081.50 a tonne last week. They have been trading in a broader
$7,080-$7,420 band for most of the past month.
President Barack Obama has won the backing of key figures in
the U.S. Congress, including Republicans, in his call for
limited U.S. strikes on Syria to punish President Bashar
al-Assad for his suspected use of chemical weapons against
Also hurting copper, the U.S. dollar hovered close to a
six-week peak versus a currency basket, as encouraging U.S.
economic data reinforced prospects of the Federal Reserve
trimming its stimulus in September.
A strong dollar makes dollar-priced metals costlier for
European and other non-U.S. investors.
Investors have this week been treated to data showing
unexpected strength at factories in the UK, Europe and China,
which consumes about 40 percent of the world's copper.
Data out on Tuesday also showed a surge in manufacturing
activity in the U.S., though the positive impact of those
numbers has been dented by fears that they strengthen the case
for the Federal Reserve to taper its stimulus programme.
"The lift from China (data) should have been substantially
more, but you've got emerging market currency concerns and Syria
engulfing confidence," said Jonathan Barratt, chief executive of
Sydney-based commodity research firm Barratt's Bulletin.
On Wednesday new data revealed the factory activity pickup
spreading to the all-important service sector in China, where
August activity hit its highest level for five months.
Investors are now bracing for a U.S. jobs report due on
Friday which might prove decisive in determining whether the
economy is strong enough for the Federal Reserve to dial back
its bond purchases in mid-September, though the decision has
been complicated by Syria.
In other metals traded, tin rose 0.12 percent to
$21,600 a tonne.
Indonesia's top tin exporter PT Timah said it has
stopped tin shipments and declared force majeure since new
regulations forcing domestic producers to trade on a local
exchange came into force last Friday.
Indonesia is the world's biggest exporter of tin and the
shortfall is already feeding into global prices, with cash tin
on the LME soaring to the highest premium against the benchmark
contract in 11 months on Wednesday.