Bloomberg News

Chile Peso Little Changed as U.S. Jobs Data Blunts Europe Crisis

November 17, 2011

Nov. 17 (Bloomberg) -- Chile’s peso, the region’s worst performer this week, ended little changed after a report that showed fewer Americans than forecast filed for unemployment insurance offset concern that Europe’s debt crisis will spread.

The peso rose less than 0.1 percent to 510.25 per U.S. dollar, from 510.45 per dollar yesterday. The currency earlier slid as much as 0.6 percent. It’s down 2.4 percent this week.

In the U.S., the drop in jobless claims came as data showed building permits rose in October to the highest level since March 2010. The yield on Spain’s 10-year bonds rose as high as 6.74 percent today, adding to concern the European debt crisis may be spreading, as German Chancellor Angela Merkel rejected calls from Nicolas Sarkozy’s French government to use the European central bank as a crisis backstop.

“There’s not been much change in the external scenario,” said Andres de la Cerda, a money markets trader at Bice Inversiones in Santiago. “We’re waiting for news to set the direction. It’s hard to see the dollar rising through 525 pesos or falling through 500 per dollar.”

The peso has underperformed the region this week as Europe’s deepening debt crisis dented demand for higher-yielding assets.

Offshore investors in the Chilean peso forwards market increased bets that the peso would fall against the dollar to $5.2 billion on Nov. 15 from $4.8 billion a day earlier, according to data published today by the central bank.

--Editors: Richard Richtmyer, Brendan Walsh

To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

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


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