METALS-Copper steadies on weak dollar, Fed eyed
* Markets focus on Fed, little fundamental news to drive metals
* Dollar hits six-month low vs euro
* BHP Billiton cuts costs, steps up iron ore, copper output
* Nickel surplus of 74,200 tonnes in H1-study group data
(Adds details, quotes; updates prices)
LONDON, Aug 20 (Reuters) - Copper steadied on Tuesday as the dollar weakened, but the metal's gains faced resistance from investor unease over an expected cut in the U.S. economic stimulus that has driven commodity markets higher.
Three-month copper on the London Metal Exchange edged up 0.1 percent to $7,311.75 a tonne by 1322 GMT, rebounding from a session low of $7,253 after falling 1.3 percent on Monday.
The dollar fell to a six-month low against the euro, supporting metals markets by making commodities priced in the U.S. currency less expensive for buyers in Europe.
But the upside on copper was limited and most other base metals weakened as uncertainty about U.S. stimulus measures unsettled financial markets.
World shares sank to their lowest in more than a month, while Brent crude oil lost more than $1 to $108 a barrel.
Yields on U.S. Treasuries edged off two-year highs as investors positioned for the probability that the U.S. Federal Reserve will begin tapering stimulus as early as next month.
The investor focus for Wednesday was on minutes from the most recent Fed meeting, which could offer more hints on when the U.S. central bank will start winding down its $85 billion-a-month support programme.
Central bankers from around the globe arrive this week in Jackson Hole, Wyoming for an annual get-together.
"With Jackson Hole and Chinese macro data on the near-term horizon, we would expect continued volatility amongst thin volumes," Marex Spectron analyst George Adcock said.
China's HSBC flash PMI is due on Thursday.
Adcock said there was little fundamental news to drive base metals.
"Our stance is that our short-term data remains positive, but our macro gross indicator and liquidity are starting to look quite toppy, although the market is still short. And thus we are not advising short positioning yet, and we will maintain a long bias until that changes," he said.
Copper prices logged gains last week for a third week running, hitting $7,420 on Friday, the highest in more than 10 weeks. Prices are still down more than 8 percent on the year.
"I do expect some better numbers from China in the next one to two months, and that gives us support for another leg up in copper prices, but it's clearly not going to be sustained," Dominic Schnider of UBS Wealth Management in Singapore said.
BHP Billiton and Glencore Xstrata wrapped up the results season for the world's big five miners. BHP held up slightly better than the others as it stepped up output of iron ore, copper, coal and oil and slashed costs in the face of sliding commodity prices.
The global nickel market was in surplus by 74,200 tonnes in the first six months of the year, according to the International Nickel Study Group.
Despite heavy overproduction, the market was expected to enjoy a temporary boost later this year as Indonesia tightens export rules, Deutsche Bank analyst Grant Spoore said.
"The prospect of some Indonesian disruption, and the improvement in demand indicators could see a price rally of about $2,000 a tonne in Q4 2013/Q1 2014, but this rally will peter out as the much-needed supply discipline from outside of China is delayed," he said in a note.
LME nickel slipped 0.7 percent to $14,711 a tonne.
Aluminium dipped 0.5 percent to $1,907.25 a tonne, zinc fell 0.5 percent to $1,979, lead lost 0.8 percent to $2,233 but tin added 0.3 percent to $21,925.
(Additional reporting by Melanie Burton; Editing by Keiron Henderson and Jane Baird)