* ShFE zinc dives at open, traders say may be fat-finger trade
* Speculators trim net long copper positions - CFTC
* Coming Up: U.S. Chicago PMI at 1345 GMT
(Adds analyst's quotes; Updates prices)
SINGAPORE, Oct 31 (Reuters) - London copper fell on Thursday after the U.S. Federal Reserve's latest outlook was seen as less dovish than some had expected, while fragile global growth and improving supply put the metal on track for its first monthly loss in four.
The Federal Reserve extended its support for a soft U.S. economy on Wednesday, sounding a bit less optimistic about growth as it announced plans to keep buying $85 billion in bonds per month.
It noted that the recovery in the housing market had lost some steam and suggested some frustration at how slowly the labor market was healing. But the central bank also dropped a phrase expressing concern about a run-up in borrowing costs, suggesting greater comfort with the current level of interest rates.
The central bank's bond purchases have buoyed commodities over the past few years by driving liquidity towards the asset class.
"The market is reacting to the FOMC (Federal Open Market Committee) comment, which has impacted the dollar and appetite for risky assets," said analyst Sijin Cheng of Barclays in Singapore.
"Copper has been stuck in a tight range for a while. But you had very high numbers on refined copper production in September...which suggests rising supply may start to weigh on people's minds," she said.
China's copper output jumped by 21 percent to around 620,000 tonnes in September from a year ago.
Three-month copper on the London Metal Exchange slipped by 0.4 percent to $7,256.75 a tonne by 0245 GMT, paring gains from the previous session when it climbed 1.3 percent.
Copper prices touched a one-week top of $7,299.50 a tonne on Wednesday. Prices are on track to end October down by around 0.8 percent, which would be the first monthly drop since June.
The most-traded January copper contract on the Shanghai Futures Exchange climbed 0.2 percent to 51,940 yuan ($8,500) a tonne.
The U.S. dollar edged further away from recent lows, in early Asian trading on Thursday. The dollar index added 0.15 percent on the day to 79.737.
Financing demand for copper is set to increase towards the end of the year, as credit conditions inside the world's top copper buyer begin to tighten, and importers book metal they can then sell in the local market to raise cash, Cheng of Barclays said.
Chinese firms may increase term bookings of refined copper imports in 2014 because they are growing more confident on the economic outlook and demand for the metal as a financing tool remains strong, industry sources at a conference in China said this week.
China's foreign trade is likely to maintain steady growth in the rest of 2013 and next year as the government's supportive measures help offset external headwinds faced by the world's second-largest economy, the Commerce Ministry said on Wednesday.
Reflecting rising uncertainty about copper's prospects, hedge funds and money managers cut their bullish bets in copper futures and options in the week ended Oct. 15, a delayed report by the U.S. Commodity Futures Trading Commission showed on Wednesday.
In other metals, ShFE zinc prices plunged by the daily limit of 4 percent at the open to 14,560 yuan a tonne on heavy volume of 700 lots which traders said looked like an erroneous trade or forced liquidation. ShFE zinc traded last down 0.8 percent at 15,045 yuan.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin ($1 = 6.0938 Chinese yuan)
(Editing by Richard Pullin and Muralikumar Anantharaman)