Bloomberg News

Chilean Peso Gains as Higher Copper Price Bolsters Trade Outlook

October 26, 2011

Oct. 26 (Bloomberg) -- Chile’s peso appreciated for a fourth day versus the U.S. dollar as higher prices for copper, the country’s main export, improved trade prospects.

The peso rose 0.2 percent to 501.11 pesos per U.S. dollar at the 1:30 p.m. market close in Santiago, from 502.26 yesterday. The currency has strengthened 3.6 percent in the past four sessions.

The peso advanced “in line with copper,” Sergio Tricio, head of research at ForexChile, said in a telephone interview today. “The weakening of the dollar in recent days versus other major currencies is also helping the peso.”

The price of copper rose as much as 4.9 percent in New York to $3.588 a pound on speculation that China, the world’s largest consumer of the metal, may lower interest rates. It has recovered 14 percent since Oct. 20, when it reached its lowest price since July 2010.

“If copper holds above the $3.50 a pound resistance level, the peso may strengthen all the way to 490 per dollar,” Tricio said.

--With assistance from Drew Benson in New York. Editors: Brendan Walsh, Richard Richtmyer

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


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