Chile’s peso advanced toward a three-month high as copper, the nation’s main export, gained on speculation growth will accelerate in the U.S. and China.
The peso appreciated 0.3 percent to 473.55 per U.S. dollar at 11:42 a.m. in Santiago after rallying on Jan. 10 to 470.95, the strongest level since Sept. 26. Copper for March delivery increased 1.2 percent in New York today
“China and the U.S. are recovering substantially,” said Alejandro Araya, a trader at Banco Santander Chile in Santiago. “Commodities are rising fast. The Chilean peso still has an advantage over the U.S. dollar.”
The recent gain in the peso is in line with other regional currencies, and the exchange rate adjusted for inflation was little changed in December from November, central bank economists said in a report yesterday. The government is closely monitoring the currency’s appreciation, President Sebastian Pinera told reporters in Santiago today.
International investors in the peso forwards market cut their short peso position to the lowest since September 2011 on Jan. 15, according to central bank data published today.
The peso rose as U.S. housing starts climbed 12.1 percent in December to the highest since 2008 in a sign residential real estate is boosting the economic expansion. China’s gross domestic product increased 7.8 percent in the fourth quarter after 7.4 percent growth in the prior period, according to the median forecast of 53 economists before a report tomorrow.
China and the U.S. are the biggest consumers of copper, which is used in the construction of new homes, while Chile is the biggest exporter.
“Copper is up,” said Ronald Volpi, the head of spot currency trading at EuroAmerica Corredores de Bolsa SA in Santiago. “Everything’s pretty.”
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