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Chile’s peso traded at a three-month low as copper, the country’s biggest export, slumped as Greece moved closer to leaving the euro and German Chancellor Angela Merkel’s party lost a state election.
The peso depreciated 1 percent to 491.49 per U.S. dollar at 10:35 a.m. in Santiago, the weakest level on a closing basis since Jan. 31. The Bloomberg JPMorgan Latin American Currencies Index fell 0.6 percent.
“The peso is still in the range we have held for two months, which has an upper limit of 492 per dollar,” said Cristian Donoso, a trader at Banchile Corredores de Bolsa SA in Santiago. “Today, because of the conversations about Greece leaving the euro, the elections in Germany, the collapse of Italian and Spanish bonds and falling copper and commodities, we’re at the top of that range.”
Offshore investors in the forwards market had a net short position of $7.9 billion on May 10, the biggest bet against the peso since October 2009.
Copper dropped as much as 2.8 percent to a four-month low in New York as European officials began to weigh the fallout of a Greek withdrawal.
The yield on Italy’s 10-year bonds rose 23 basis points, or 0.23 percentage point, to 5.71 percent, and the yield on Spain’s 10-year bonds increased 26 basis points to 6.22 percent.
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