* BOE cuts growth forecast, France eyes recession
* Markets hope for ECB action to help Spain, Italy
* Coming up: China inflation, industrial output data Thurs.
By Chris Kelly and Harpreet Bhal
NEW YORK/LONDON, Aug 8 (Reuters) - Copper retreated on Wednesday from a one-week high hit in the previous session as risk sentiment soured amid further signs of worsening economic conditions in Europe.
Copper prices fell for the first time in four days, largely tracking losses in the euro versus the dollar, after a drop in German imports and industrial production only added to the worrisome growth prospects in the region and spurred more caution in the market ahead of trade data from top metals consumer China on Thursday.
The Bank of England cut its forecast for medium-term economic growth in Britain and a new central bank forecast put France in recession in the third quarter.
"It's hard to look at copper and see a major advance over the near-term given the economic scenario," said B ill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
COMEX copper for September delivery fell 1.90 cents to settle at $3.4215 per lb, after dealing in a range between $3.4030 and $3.4330. On Tuesday, it rallied to a one-week high at $3.4490.
COMEX volumes neared 56,500 lots in late New York trade, more than a quarter above the 30-day norm, according to preliminary Thomson Reuters data.
London Metal Exchange (LME) benchmark copper closed down $30 at $7,550 a tonne, also fading away from a one-week high hit on Tuesday at $7,612.75.
Investor focus will now shift to Chinese inflation and industrial production figures due on Thursday and Chinese trade data Friday for an indication of the pace of growth in a country that accounts for around 40 percent of global copper demand.
"China's macro data tomorrow and the trade data on Friday are fairly important for direction as it's a confused picture for copper," said Standard Chartered analyst Daniel Smith.
"Demand is not that bad: in our view it's growing at about 5 percent, and China's imports have been surprising on the upside so it'll be interesting to see how long that carries on. Sentiment on the ground is pretty downbeat though. Obviously the global manufacturing PMI is still turning lower. That's one of the reasons why copper has struggled."
Reflecting a lack of conviction about copper's short-term price direction, the open interest in the LME copper contract remained near recent five year lows, despite a slight uptick.
MONETARY EASING HOPES
Improving risk appetite helped lift copper prices earlier this week, with market participants hoping that the European Central Bank will start buying bonds to help contain surging borrowing costs for Spain and Italy.
"The sense from the recent ECB meeting is that maybe things will not get significantly worse and that the ECB may start to act as a lender of last resort," said Robin Bhar, analyst at Societe Generale.
"That perhaps has put a floor under metals prices and, barring any further negative news, one could argue most of the bearish news flow should be in the price."
Further hopes for easing were raised on the other side of the Atlantic, when Boston Fed Bank President Eric Rosengren said the central bank should launch another bond buying programme of whatever size and duration is necessary to get the economy back on its feet.
"I think the market is trying to bottom out here. We are in a kind of wait-and-see mode as far as what the central banks are doing," L OGIC Advisors' O' Neill S aid.
"Even though copper demand and global economic activity still does not look that great, there's been enough to hold prices up."
Copper rose 3.5 percent over the last three days, its biggest three-day rally in more than a month, but is still down almost 2 percent so far this quarter.
In other metals, tin shed $70 to end at $18,200 a tonne, erasing a part of Tuesday's rally linked to news that Indonesia's PT Timah stopped selling tin on the spot market because of low market prices.
Indicating a tightening market, the premium for cash tin over three months moved from a $16 discount to a $13 premium in Tuesday's trade.
Metal Prices at 1744 GMT
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 341.60 -2.45 -0.71 343.60 -0.58
LME Alum 1914.00 4.50 +0.24 2020.00 -5.25
LME Cu 7550.00 -30.00 -0.40 7600.00 -0.66
LME Lead 1910.00 1.00 +0.05 2035.00 -6.14
LME Nickel 15740.00 -10.00 -0.06 18710.00 -15.87
LME Tin 18200.00 -70.00 -0.38 19200.00 -5.21
LME Zinc 1869.00 -4.00 -0.21 1845.00 1.30
SHFE Alu 15425.00 55.00 +0.36 15845.00 -2.65
SHFE Cu* 54850.00 -10.00 -0.02 55360.00 -0.92
SHFE Zin 14675.00 65.00 +0.44 14795.00 -0.81
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
Source: http://www.reuters.com/article/2012/08/08/markets-metals-idUSL6E8J859K20120808
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