Chile Peso Falls as U.S. Consumer Spending Declines in June

Chile’s peso fell as U.S. consumer spending dropped unexpectedly for the first time in two years and copper prices slid for the second day in a row.

The peso decreased 0.4 percent to 458.83 pesos per U.S. dollar at 1:31 p.m. New York time, from 456.85 yesterday.

“The U.S. data on income and personal spending came out lower than expected, which is having a depreciative effect on emerging-market currencies like the Chilean peso,” Raul Lopez, head currency trader at Banco Penta, said in a phone interview from Santiago. “Copper is also depreciating today, which is adding to the pressure against the peso.”

Consumer spending in the U.S. dropped 0.2 percent in June after rising 0.1 percent the month before, Commerce Department figures showed today. The median forecast in a Bloomberg survey was for a gain of 0.1 percent. Incomes expanded at the slowest pace since November and the savings rate rose.

Copper, which accounts for half of Chile’s exports, dropped 0.4 percent. It has tumbled 2 percent in the last two days.

Chile’s one-year interest-rate swap rate, which reflects traders’ views of future rates, fell seven basis points, or 0.07 percentage point, to 5.48 percent.

To contact the reporter on this story: Bryan Gibel in New York at bgibel@bloomberg.net

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

Bloomberg reserves the right to edit or 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.