Chile’s peso advanced the most in six weeks as U.S. politicians agreed to avoid automatic tax increases that would have threatened the recovery of the second- biggest buyer of the South American nation’s exports.
The peso appreciated 0.7 percent to 475.55 per U.S. dollar at 10:35 a.m. in Santiago, the biggest gain on a closing basis since Nov. 19. The currency appreciated 8.4 percent in 2012.
Copper, Chile’s biggest export, advanced to a three-week high as President Barack Obama said he will sign into law a congressional bill undoing tax increases for more than 99 percent of households.
“We now know there’ll be a deal in the U.S., and that means the uncertainty has diminished, so the exchange rate is falling,” said Sebastian Senzacqua, an economist at Bice Inversiones in Santiago, referring to reduced demand for the dollar as a refuge.
Evidence of strength in China supported copper, Senzacqua said. Chinese manufacturing expanded at the fastest pace in 19 months in December, according to data published by HSBC Holdings Plc and Markit Economics on Dec. 31. China and the U.S. are the biggest buyers of Chile’s exports.
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