Bloomberg News

Chile Peso Gains Third Day as U.S. Jobs Boosts Copper Outlook

March 09, 2012

Chile’s peso strengthened for a third day, reversing an earlier decline, after U.S. employers increased payrolls more than forecast, bolstering trade prospects for the biggest copper-producing nation.

The peso climbed 0.2 percent to 483.57 per U.S. dollar at 11:08 a.m. in Santiago after sliding 0.1 percent. The currency surged the most in a month yesterday.

Copper gained as much as 1.4 percent in London and U.S.- equity index futures rallied as Labor Department figures showed a 227,000 increase in payrolls in February, beating the 210,000 median projection of economists in a Bloomberg News survey. Copper accounts for more than half of Chile’s exports.

“The U.S. jobs figures were good,” said Eugenio Cortes, head of currency forwards at EuroAmerica Corredores de Bolsa SA in Santiago. “Stock futures turned positive, the dollar appreciated versus the euro and copper rose a bit.”

The peso weakened earlier today along with the euro as Greece pushed through the biggest sovereign restructuring in history after cajoling private investors to forgive more than 100 billion euros ($132 billion) of debt.

Chile’s currency surged 1.1 percent yesterday, while interest-rate swaps jumped, after consumer prices rose 0.4 percent in February, double the median estimate of 18 economists surveyed by Bloomberg. Swaps were little changed today.

“The scenario has changed,” Cortes said. “Yesterday, before the inflation number, the market was incorporating at least 50 basis points of interest-rate cuts and now nobody is talking about cuts. That’s pressuring the peso to appreciate. If the external scenario remains calm, we should return to 475.”

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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