Shanghai copper fell 1 percent on Wednesday, after China's central bank signalled another move to tighten monetary policy and the dollar gained, but sentiment was still supported by strong China demand outlook. The US dollar hit a five-month high against the euro on continued concern about Greece's fiscal problems and after breaking below a key chart level that could signal a bearish trend for the currency.

Chinese banking authorities have instructed some major banks to halt their lending during the rest of January after a burst of credit in the first couple of weeks, official media and banking sources said on Wednesday. Just on Tuesday, the central bank lifted the auction yield on one-year bills in its regular open market operations on Tuesday, a second week in a row.

Copyright Reuters, 2010