LONDON, Dec 10 (Reuters) - Copper climbed higher on Wednesday, lifted by the dollar's fall against the euro and as sentiment improved on hopes of a deal on a bailout plan for U.S. automakers.

However, the gains were capped with no fundamental news backing up the rise and as the weak consumption outlook for metals in a gloomy global economy persisted, analysts said.

Copper for three-months delivery on the London Metal Exchange rose to a session high of $3,290.25 a tonne and was last at $3,262 a tonne by 1020 GMT from $3,200 a tonne on Tuesday, when it tumbled 6.5 percent.

"Copper's moving closely in line with what is going on in the dollar," said analyst Leon Westgate at Standard Bank, adding news of U.S. lawmakers nearing an agreement on a plan to rescue the stricken automakers also injected some optimism.

The dollar and the yen fell while the euro hit a two-week high against the U.S. currency.

Traders have been selling the dollar and the low-yielding yen when stocks gain and market volatility calms, which boosts sentiment and quells demand to dump risky assets.

However, traders and analysts saw little room for a sustainable rally, saying the weaker outlook for metals consumption in the next few months has not changed.

"We're just seeing a bit of a bounce from yesterday's lows. But the fundamentals have not changed; it is still all doom and gloom," an LME trader said.

RIO CUTS JOBS Global miner Rio Tinto's latest announcement confirmed the trader's gloomy comments. It said that it was cutting 14,000 jobs in response to the global downturn.

"We expect other miners to follow a similar path to reduce operating costs and to trim higher cost production areas," said John Meyer, head of resources at UK-based investment bank Fairfax in a research note.

The company has been under pressure since its share price collapsed after larger rival BHP Billiton scrapped a $66 billion takeover bid for the company last month.

Macro data from the world's top copper consumer China highlighted risks of deflation. The country's annual producer price collapsed for the third consecutive month to 2 percent in November.

"Inflationary pressures are falling," said analyst Michael Widmer at BNP Paribas. "Another way to interpret is; because the inflation is coming down the Chinese government could do more to stimulate the economy," he said.

China is among several countries which announced a massive spending package, including infrastructure investments, to revive domestic demand.

Other metals were higher, tracking copper. Aluminium was at $1,525 a tonne from $1,510 on Monday, shrugging off another hefty rise in stockpiles, which rose to nearly 1.9 million tonnes - having doubled since the start of the year.

Nickel was at $9,599 a tonne from Tuesday's $9,400 a tonne while lead rose to $997 a tonne from $970 a tonne.

Zinc was almost unchanged at $1,116 from $1,115 and tin was $200 higher at $12,000 a tonne.