Chilean Peso Weakens as China, Europe Data Reduce Risk Appetite
February 23, 2012, 1:37 AM ESTBy Eduardo Thomson
Feb. 22 (Bloomberg) -- Chile’s peso weakened, snapping a four-day winning streak, after lower-than-forecast economic data from Europe and China pushed commodity prices lower and stifled demand for riskier emerging-market assets.
The peso fell 0.2 percent to 482.4 per U.S. dollar at 9:46 a.m. in Santiago, from 481.5 yesterday.
“Bad numbers from Europe are hitting the euro, and data from China is affecting commodity prices,” Cristian Donoso, a trader at Banco de Chile, said in a phone interview.
A purchasing-managers index of euro-area services and manufacturing dropped to 49.7, London-based Markit Economics said, below the 50.5 median estimate of economists surveyed by Bloomberg. Also, a preliminary indicator from HSBC Holdings Plc and Markit Economics signaled that Chinese manufacturing activity may shrink for a fourth straight month.
The price of copper, Chile’s main export, retreated as much as 1 percent in New York and European stocks fell. The euro weakened as much as 0.2 percent.
A central bank survey today said that Chilean traders and investors forecast the monetary authority will keep its key interest rate at 5 percent in March as inflation estimates increase. Traders also raised their 12-month annual inflation forecast to 3.2 percent from 3.09 percent on Feb. 7.
Donoso said that he would seek to sell pesos if the currency moved near 480 or 481 per dollar and buy pesos if it moved to 485 per dollar.
--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
