LONDON - Copper prices touched their highest levels in three weeks on Friday after U.S. central bank authorities signalled slower interest rate rises, knocking the dollar lower.

Also supporting the market is a tight supply backdrop for the metal mainly used in power and construction, with inventories sliding and miners scaling back production plans.

Three-month copper on the London Metal Exchange (LME) rose 0.4% to $7,790 a tonne in official open outcry trading after touching its highest since July 8 as it remained on course for a sixth straight day of gains.

The U.S. economy unexpected contracted in the second quarter, data showed on Thursday, which could deter the Federal Reserve from continuing to increase interest rates aggressively to battle inflation.

That helped to dampen the dollar index, which fell to its lowest since July 5. A weaker U.S. currency makes dollar-priced commodities cheaper for buyers using other currencies.

"The U.S. dollar's weakened, buoying prices for commodities. What's happened? This week the Fed recognised slowing U.S. growth, so its rate hike cycle's slowing," said Tom Price, head of commodities strategy at Liberum.

"But I don't think that makes the outlook any better. If the U.S. economy really is under pressure, that's inherently bearish for commodities. Meanwhile, over in China - the world’s biggest commodity consumer - growth's deteriorating further."

Price said that, after the current "mechanical bounce" loses steam, commodities will remain under pressure in the coming months.

Copper's robust performance recently has been helped by worries over mine supply.

Miner and trader Glencore on Friday cut its full-year copper output guidance, adding to a string of other miners trimming production estimates.

The most-traded September copper contract on the Shanghai Futures Exchange ended daytime trading 1.7% up at 60,100 yuan ($8,928.70) a tonne.

In other LME metals, aluminium slipped 0.8% in official activity to $2,437.50 a tonne and tin shed 0.4% to $24,250.

Zinc jumped 3.2% to $3,261, lead gained 1.3% to $2,022 and nickel added 0.3% to $22,000.

(Reporting by Eric Onstad; additional reporting by Brijesh Patel in Bengaluru; editing by David Goodman and Jason Neely)