Breaking News

NASA Chooses Boeing, SpaceX to Transport U.S. Astronauts
Tweet TWEET

Chile Peso Advances to Two-Week High as Copper Prices Increase

Chile’s peso rose to a two-week high today after copper, the country’s biggest export, gained, offsetting a report showing economic growth trailing forecasts.

The peso gained 0.3 percent to 478.95 per U.S. dollar, the strongest since Nov. 22, from 480.15 on Dec. 3. Copper for March delivery rose past $4 a pound.

Chilean economic activity expanded 4.8 percent from a year earlier in October, the central bank said today. That’s less than the 5.8 percent median forecast of 15 economists surveyed by Bloomberg. Copper rose to a three-week high as a strike at the Collahuasi mine continued for a 32nd day.

“Copper picked up and that coincided with the rise in the Chilean peso,” said Katia Diaz, an economist at 4Cast Inc. in New York. “Even though the gains in copper were marginal, it buoyed the peso and that offset the weaker-than-expected economic number.”

Output from mines, fishing and factories was weak in October, the central bank said. On a seasonally-adjusted basis, activity shrank 0.6 percent from a month earlier, the biggest decline since March.

Interest-rate swaps in pesos fell in every maturity from three months to 10 years following the activity data. The one- year swap rate dropped four basis points to 4.01 percent. The two-year swap rate fell four basis points to 4.52 percent.

The one-year inflation-linked swap rate fell nine basis points to 0.63 percent.

“The activity index clearly points to lower swap rates,” said Felipe Alarcon, an economist at Banco de Credito e Inversiones. “It gives ammunition to the central bank to consider a pause in rate rises.”

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

To contact the editor responsible for this story: David Papadopoulos at Papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.