The Chilean peso gained, reversing an earlier decline, as copper rose in New York on data that showed U.S. sales of existing homes accelerated in July.
The peso appreciated 0.3 percent to 481.17 per U.S. dollar as of 11:53 a.m. in Santiago. The Bloomberg JPMorgan Latin American Currency Index fell 0.1 percent.
Copper climbed 0.1 percent on the Comex in New York after the U.S. data. The metal, used in wiring and pipes for new homes, accounts for more than half of Chile’s exports. The peso is the second-best performing currency in the world this year as faster-than-forecast growth has led the central bank to to keep its benchmark interest rate at 5 percent, luring investors seeking higher yields than available in developed markets.
“The Chilean peso doesn’t have much room to weaken.” said Alejandro Araya, a currency trader at Banco Santander Chile in Santiago.
The currency will trade at 485 per dollar in seven days and weaken toward 500 per dollar at the end of the year, according to the median forecast of 51 traders and investors in a central bank survey published today.
International investors in the Chilean peso forwards market had an $8.5 billion bet against the currency on Aug. 20, up from $8.1 billion a week earlier.
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