Bloomberg News

Chilean Peso Appreciates as S&P 500 Breaks 1,400 on U.S. Data

March 15, 2012

Chile’s peso gained after reports that showed signs of strength in the U.S. economy pushed the Standard & Poor’s 500 Index past 1,400 for the first time since 2008 and boosted prices of the country’s biggest export, copper.

The peso strengthened 0.9 percent to 482.25 per U.S. dollar at the close of trading today, from 486.5 yesterday. The Bloomberg JPMorgan Latin American Currency Index climbed 0.4 percent as of 2:41 p.m. in Santiago. Copper for May delivery rose as much as 1.4 percent to $3.9030 a pound.

Chile is the world’s biggest copper exporter and the U.S. is its third-largest customer for the metal used in homes and cars. The S&P 500 climbed 0.4 percent to 1,400.28 as reports on manufacturing and jobless claims bolstered optimism in the U.S. economy.

“Once the S&P broke 1,400 points there was a wave of dollar selling,” said Cristian Donoso, a trader at Banchile Corredores de Bolsa SA in Santiago. “That broke the support level at 483 to 484 pesos per dollar.”

The Chilean central bank will probably leave its target overnight rate unchanged today at 5 percent, according to all 17 economists surveyed by Bloomberg, as the outlook for economic growth improves and inflation expectations rise.

Offshore investors in the Chilean peso forwards market had a $5.5 billion short position in the currency on March 13, little changed from a day earlier, according to central bank data.

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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