(Updates prices)
SHANGHAI, Jan 16 (Reuters) - Base metals traded mixed on Thursday as the dollar weakened after soft U.S. core inflation raised hopes that the Federal Reserve could cut interest rates further.
The dollar index paused its rally following the release of core consumer price index data. It was last at 109.09 - a 1% retreat from the 26-month high of 110.17 hit on Monday.
A weaker dollar makes greenback-priced commodities cheaper for holders of other currencies.
Excluding volatile food and energy components, the U.S. core CPI increased 3.2% on an annual basis, compared with an expected 3.3% rise.
Traders of interest-rate futures now expect the Fed to cut rates twice by the end of this year, with the first reduction to come in June.
Three-month aluminium on the London Metal Exchange (LME) rose 0.4% to $2,612 a metric ton by 0346 GMT, bolstered by the European Commission's plan to ban Russian aluminium.
The European Commission intends to propose a ban on imports of Russian primary aluminium in its 16th package of sanctions against Russia over its invasion of Ukraine, European Union diplomats said on Tuesday.
"Russian shipments of the metal to Europe have already fallen due to widespread self-sanctioning by manufacturers. Any further restrictions would likely see only a limited impact on the market," ANZ Research said in a note.
LME copper rose 0.4% to $9,206, tin remained flat at $29,590, nickel was down 0.2% to $15,815, lead added 0.4% to $1,942.5 while zinc slid 0.1% to $2,859.5.
The most-active copper contract on the SHFE was up 0.9% at 75,910 yuan ($10,353.95) a ton.
SHFE aluminium added 0.8% to 20,320 yuan a ton, nickel was flat at 127,480 yuan, zinc fell 0.7% to 23,720 yuan, lead remained flat at 16,590 yuan and tin added 0.4% to 246,840 yuan.
For the top stories in metals and other news, click or ($1 = 7.3315 Chinese yuan renminbi) (Reporting by Violet Li and Mei Mei Chu; Editing by Subhranshu Sahu and Mrigank Dhaniwala)
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