Bloomberg News

Chile Peso Falls as Peru Concern, Stock Slump Stifle Demand

June 06, 2011

June 6 (Bloomberg) -- Chile’s peso fell on speculation the victory of Ollanta Humala in Peru’s presidential election will lead to slower economic growth in the neighboring country, and a global fall in equities cut demand for emerging-market assets.

The peso fell 0.1 percent to 468.45 per U.S. dollar at 3:44 p.m. New York time, from 467.85 on June 3.

Humala, a former army rebel and a one-time ally of Venezuelan President Hugo Chavez, claimed victory in the runoff yesterday against Congresswoman Keiko Fujimori, sparking concern that he will seek greater state control of the economy. U.S. stocks retreated for a fourth day as banks led losses amid concern that economic growth is slowing.

“The neighborhood is becoming a bit more complicated with Humala, so returning to the 460 level will be difficult,” Raul Lopez, head of currency trading at Banco Penta in Santiago, said in a phone interview. “The peso-dollar ratio could explode up to 480 if there is any more bad news.”

Chile’s central bank paid an average of 468.91 pesos per U.S. dollar for $50 million as part of a $12 billion effort to limit the peso’s gains, it wrote today on its website.

--Editors: Glenn J. Kalinoski

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus