Chilean Peso Weakens Most Among Emerging Markets on U.S. Data, Ireland

Chile’s peso fell, leading declines by emerging-market currencies, after Standard & Poor’s cut its rating on Ireland’s debt and U.S. durable goods orders increased less than forecast in July.

The peso depreciated 0.9 percent to 509.25 per U.S. dollar as of 10 a.m. in New York from 504.45 yesterday. Chile’s currency reduced its gain this month to 2.4 percent, the steepest among 25 developing currencies tracked by Bloomberg after Thailand’s Baht.

Orders for durable goods in the U.S. increased 0.3 percent last month, the Commerce Department said today, less than the 3 percent median forecast of 75 economists in a Bloomberg survey. S&P cut Ireland’s bond rating one step to AA- after raising its forecast for the cost of recapitalizing the country’s banks.

“U.S. activity data has been pretty bad and it looks like we’re going into a period of slower growth and in Europe it’s the downgrade to Ireland and widening credit spreads,” said Alejandro Araya, a currency trader at Banco Santander SA in Santiago. “Ireland, Spain, Portugal and Greece are having funding problems again and that’s being felt in credit spreads and risk indicators so the dollar is rising here.”

To contact the reporter responsible on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

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