Nov. 9 (Bloomberg) -- Chile’s peso rallied to a 14-month high against the dollar as Group of 20 finance officials pledged to maintain stimulus measures, bolstering demand for higher- yielding, emerging-market assets.

The peso advanced the most in four months, rising 1.8 percent to 512.5 per U.S. dollar, its strongest since Aug. 29, at 3:10 p.m. New York time. The peso has jumped 8.2 percent in the past month, the best performance against the dollar among 26 emerging-market currencies tracked by Bloomberg.

“There is more global investor optimism, appetite for risk, after the G-20 said it would maintain stimulus,” said Diego Echenique, a trader with Larrain Vial SA in Santiago.

Policy makers from the Group of 20 nations said on Nov. 7 that it’s too early to withdraw spending intended to revive growth. The peso also got a boost from higher prices for copper, of which Chile is the world’s top producer, Echenique said.

Chile’s central bank said today that the nation had a trade surplus of $881 million in October after exports expanded to the most in 12 months, helped by rising prices of copper.

“These developments are positive for the Chilean peso” and will give the central bank “more room” to hold down interest rates to stimulate an economic recovery, Goldman Sachs Group Inc. analyst Alberto Ramos wrote in a report today from New York.

Chavez Threat

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, slipped one basis point, or 0.01 percentage point, to 3.04 percent, according to Bloomberg composite prices.

In Colombia, the peso climbed 0.9 percent to 1,966.34 per U.S. dollar, from 1,984.55 at the end of last week.

Venezuelan President Hugo Chavez’s call for military commanders to prepare for a possible war with neighboring Colombia is unlikely to weaken the peso, said Alexander Cardenas, chief analyst at Acciones y Valores SA.

“The market sees Chavez’s comments as little more than a threat that isn’t potentially dangerous for the peso in the short term,” Cardenas said in a telephone interview from his office in Bogota. “Right now the peso is following global risk appetite, the stronger Brazilian real.”

Chavez yesterday told his military and civil militias to prepare for possible combat as tensions mount over an agreement giving U.S. troops access to Colombian military bases.

‘Avoid a War’

“Generals of the armed forces, the best way to avoid a war is to prepare for one,” Chavez said on state television as he accused Colombia of handing over its sovereignty to the U.S. “Don’t make the mistake of attacking: Venezuela is willing to do anything.”

Colombia, which says the accord will help combat drug trafficking, said it will raise Chavez’s threats with the Organization of American States and the United Nations Security Council.

The yield on Colombia’s 11 percent bonds due in July 2020 rose three basis points to 8.21 percent, according to Colombia’s stock exchange.

Argentina’s peso was little changed at 3.8152 per dollar from 3.8157 on Nov. 5. Argentine markets were closed Nov. 6 for a bank holiday. The yield on the country’s inflation-linked peso bonds due in 2033 climbed 1 basis point to 11.42 percent, according to Citibank Argentina.

Venezuela’s bolivar was unchanged at 5.38 per dollar in unregulated parallel market trading, traders said. Venezuelans buy dollars in the parallel market when they can’t get government authorization to purchase them at the official exchange rate of 2.15 per dollar.

Peru’s sol rose 0.4 percent to 2.887 per dollar, from 2.899 on Nov. 6. The yield on Peru’s 8.6 percent sol-denominated bond due August 2017 climbed one basis point to 4.97 percent, according to Citigroup Inc.’s local unit.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net

Last Updated: November 9, 2009 15:42 EST