MELBOURNE, Jan 31 (Reuters) - London metals shrugged off slightly softer-than-expected Chinese manufacturing data on Tuesday to edge higher as the dollar eased, but conviction was lacking ahead of the outcome of the Federal Reserve's two-day meeting. Metals found a firmer footing after the dollar inched lower against a basket of major rivals on Wednesday, showing scant reaction so far to U.S. President Donald Trump's State of the Union address. Standard Chartered said however given a "more favourable macro environment - a weaker US and our expectations for global growth" it has raised some of its metals price forecasts, including for copper by $550 to $7,150 a tonne for this year. FUNDAMENTALS: * COPPER: London Metal Exchange copper traded up by 0.6 percent at $7,090 a tonne by 0527 GMT in light volume following a 0.5 percent loss in the previous session when prices hit the lowest in nearly a week at $6,994 a tonne. Shanghai Futures Exchange copper slipped 0.5 percent to 52,980 yuan ($8,373) a tonne. * ARBITRAGE: Even thought the import differential favours shipping copper into China at the minute, traders are cautious because they do not want to hold stock over Chinese New Year, a trader said. The Lunar New Year holiday starts on Feb. 15. * CHINA ECONOMY: Growth in China's manufacturing sector slowed more than expected in January to an eight-month low in the face of a cooling property market and tighter pollution rules that have curtailed factory output. The official Purchasing Managers' Index (PMI) dipped to 51.3 in January, from 51.6 in December. * CHINA SMOG: China is drawing up plans to extend curbs on smog over the 2018-2020 period, an environment ministry official said on Wednesday, after a five-year crackdown on pollution helped it meet its air quality targets last month. * JAPAN ECONOMY: Japan's industrial output grew in December at the fastest pace in eight months, and up for a third straight month, in a sign that its humming factories have likely driven economic expansion for an eighth consecutive quarter. * FOMC: The U.S. Federal Reserve Open Market Committee will issue a statement later on Wednesday with most analysts expecting the bank to hold rates steady but take a hawkish position on the economy. * U.S. President Donald Trump urged lawmakers on Tuesday to work toward bipartisan compromises, but pushed a hard line on immigration, insisting on a border wall and other concessions from Democrats as part of any deal to protect the children of illegal immigrants.