Nov. 24 (Bloomberg) -- Chile’s peso gained as copper, the country’s biggest export, rebounded after a report showed German business confidence improved this month even as policy makers struggled to contain the European debt crisis.
The peso gained 0.3 percent to 523.15 per U.S. dollar from 524.95 yesterday.
The peso sank to a seven-week low yesterday as concern the European crisis would erode global economic growth cut into demand for emerging-market currencies. Munich-based Ifo institute reported today that German business confidence rose for the first time in five months, damping those concerns.
“This is a respite” after the selloff in recent days, said Cristian Donoso, a trader at Banchile Inversiones in Santiago. “The uncertainty and noise around European debt and the global deceleration is still there, but the market is taking a breather after its beating.”
The peso earlier gained as much as 1 percent to 519.75 per dollar, before retreating after German Chancellor Angela Merkel said she still opposes joint euro area bond sales.
The price of a pound of copper for March delivery rose as much as 1.2 percent to $3.332 on the Comex in New York after yesterday closing below $3.3 a pound for the first time in a month. Copper accounts for more than half of Chile’s exports.
Offshore investors in the Chilean peso forwards market kept their short position in the peso little changed at $5.5 billion on Nov. 22 from Nov. 21.
--Editors: David Papadopoulos, Marie-France Han
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