Bloomberg News

Peru’s Sol Rises Most in Month on Tax Payments, U.S. Economy

April 11, 2012

Peru’s sol advanced the most in a month after companies bought the currency to pay taxes and as signs of strength in the U.S. economy spurred demand for higher- yielding, emerging-market assets.

The sol strengthened 0.1 percent to 2.6620 per U.S. dollar at today’s close, from 2.6658 yesterday, according to Deutsche Bank AG’s local unit.

“There has been a lot dollar selling by companies needing to pay income tax,” said Roberto Melzi, a strategist at Barclays Capital Inc. in New York. “Latin American currencies should appreciate because they are linked to the U.S. economy, which is doing relatively well.”

The Federal Reserve said the U.S. economy expanded at a “modest to moderate” pace from mid-February through late March as manufacturing, hiring and retail sales strengthened.

Peru’s central bank bought $82 million in the spot currency market today to stem gains in the sol. It paid an average of 2.6635 soles per dollar, the bank said in a statement on its website.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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