Bloomberg News

Chile Peso Gains as Easing Europe Concern Blunts Copper Fall

October 19, 2011

Oct. 19 (Bloomberg) -- Chile’s peso strengthened for the first time in three days as global stocks and the euro climbed before a gathering of European leaders aimed to stem the region’s debt crisis.

The peso advanced 0.4 percent to 508.73 per U.S. dollar at 10:39 a.m. Santiago time from 510.92 yesterday.

“The strengthening of the peso earlier today can be explained by the global weakening of the dollar versus the euro after news yesterday came out that Europe could expand its rescue fund,” said Sergio Tricio, head of research at ForexChile in Santiago. “Now it’s paring as the price of copper falls.”

Europe’s leaders are set to meet Oct. 23 to discuss ways of increasing the region’s firepower in combating the credit crisis. German Finance Minister Wolfgang Schaeuble hasn’t specified how much additional strength the European bailout fund may have and negotiators are still in “intensive discussions,” ministry spokesman Martin Kotthaus said today. The Guardian newspaper said yesterday Germany and France agreed to boost the area’s rescue fund.

The MSCI All-Country World Index climbed 0.6 percent. The euro appreciated 0.7 percent to $1.3843.

Copper, Chile’s biggest export, dropped 1.8 percent to $3.299 a pound by 8:10 a.m. on the Comex in New York. Prices are up 4.7 percent this month after plunging 25 percent in September.

--Editors: James Attwood, Marie-France Han

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomosn1@bloomberg.net

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


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