Copper prices continued to fall for their fifth consecutive session on Thursday to their three-month low on arbitrage trading between London and Shanghai, attracting consumers to buy the dip.

Three-month copper on the London Metal Exchange (LME) dipped to $8,867 per metric ton, its lowest since Aug. 12. It last traded 1.9% lower at $8,874 by 1133 GMT.

It came under pressure with more traders taking advantage of price gaps between the LME and its Chinese peer, the Shanghai Futures Exchange (ShFE).

Quite some short-LME-buy-ShFE activity was seen these few days to push down the LME prices, senior metals strategist Alastair Munro with Marex said.

But the downside could be limited as he saw a return of physical copper buyers to LME after consecutive days of declines.

That includes consumers from South America and Europe, he said.

On the macro front, metals prices remain pressed by a strong U.S. dollar, currently at its one-year high. It makes the greenback-priced metals more expensive for other currency holders.

Supporting the dollar is also a growing expectation for fewer interest rate cuts from the Federal Reserve next year as inflation remained sticky.

Keeping interest rate high will support dollar buying.

More cues on the future path of policy rates will come with the producer price index (PPI) and remarks from Fed Chair Jerome Powell, due later in the day.

For other metals, zinc fell 3% to $2,888.5 as steel market in China remained weak to depress the galvanising demand.

LME aluminium fell 1% to $2,508 a ton, nickel dropped 0.5% to $15,655, lead lost 1.9% to $1,971and tin fell 1.9% to $29,075.

(Reporting by Julian Luk; Editing by Shreya Biswas)