Bloomberg News

Chilean Peso Reaches Strongest in Two Months on Copper, Europe

January 12, 2012

Jan. 12 (Bloomberg) -- Chile’s peso rose to the strongest level in two months as surging copper prices and better-than- forecast European debt sales bolstered appetite for riskier, emerging market assets.

The peso gained 1.2 percent to 499.89 per U.S. dollar from 506.07 yesterday, the first time the currency has breached the 500 level on a closing basis since Nov. 11.

“Copper has recovered a lot in the last two days, so that is having an effect on an intraday basis, and the debt auctions in Spain and Italy were much better than expected,” said Mauricio Olivares, a trader at the local unit of Bank of Nova Scotia. “Traders are also seeing that the central bank will keep rates unchanged today after higher inflation in December.”

Copper, which accounts for more than half of Chile’s exports, rose as much as 3.5 percent in New York after Spain sold 10 billion euros of bonds, twice as much as planned, and Italy paid less than half the prior interest rate in a sale of one-year Treasury bills, easing concern that euro-region governments might struggle to fund their debts.

Chile’s central bank is expected to keep the benchmark overnight interest rate at 5.25 percent for a seventh straight month, according to 15 of 20 economists surveyed by Bloomberg. Five expect a quarter-point cut. The bank will announce its decision from 6 p.m. local time.

--Editors: James Attwood, Richard Richtmyer

To contact the reporter on this story: Eduardo Thomson in Santiago at

To contact the editor responsible for this story: David Papadopoulos at

American Apparel's Future

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

blog comments powered by Disqus