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METALS-Copper under dollar pressure as nears worst week since May

Zandi Shabalala

* GRAPHIC-2019 asset returns:

* LME stocks jump to highest since June 2018 (Updates throughout, changes dateline from SINGAPORE)

LONDON, July 5 (Reuters) - Copper fell on Friday and was headed for its worst weekly decline since May as a weaker dollar put metals under pressure and inventories in London Metal Exchange (LME) warehouses rose.

The U.S. currency eased against a basket of major currencies, making dollar-denominated commodities such as copper cheaper for non-U.S. firms, ahead of U.S jobs data.

"The somewhat stronger dollar (is) weighing on the commodities space," Commerzbank analyst Daniel Briesemann.

Benchmark three-month copper fell 0.7% to $5,877 per tonne by 1115 GMT, on track to fall nearly 2% on the week.

Briesemann added that the near 2% decline in copper this week was due to markets seeking a firm deal between the United States and China after the world's two largest economies agreed to a truce at the weekend.

The nearly year-long trade dispute has rattled financial markets and dented demand for metals.

But on Friday, exchange data showed headline inventories of copper in LME warehouses rose 31,450 tonnes to 302,975 tonnes, its highest in over a year, helping to erode a supply deficit this year. <MCUSTX-TOTAL>

SHANGHAI: Copper stocks in warehouses approved by the Shanghai Futures Exchange fell 3.5% to 140,904 tonnes from last Friday but are up about 23% so far this year. <CU-STX-SGH>

CHINA PREMIUMS: Chinese Yangshan copper import premiums <SMM-CUYP-CN> closed at $60.50 on Friday, its highest since Feb.

CHINA: Chinese banks extended less in new yuan loans in June, according to a Reuters calculation based on official data, but regulators assured that credit needs of the broader economy were met.

GLENCORE: Congolese security forces evicted thousands of illegal miners from a copper and cobalt mine run by Glencore , sparking angry protests outside the governor's office and looting of shops, local activists said. EUROPE DATA: German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe's largest economy was likely to remain weak in the coming months.

ZINC SPREADS: The premium of cash zinc to the three-month contract fell to $5 per tonne on Friday, down from $161 in May and the lowest since March, suggesting greater availability of nearby metal. <CMZN0-3>

Available LME stocks have risen about 25% since June 4 to 73,700 tonnes. <MZNSTX-TOTAL>

"The operating rate from Chinese large scale smelters has increased during June on the back of higher margins, which is helping to speed up output growth," analysts at ING said in a note, adding that they are forecasting a surplus in China from July and the rest of the year.

(Additional reporting by Mai Nguyen; Editing by Alexander Smith)