Chile Peso Reaches Five-Month High on Greece Accord, Copper Gain
Chile’s peso rose to the strongest level in five months as Greek leaders reached a deal on austerity measures and copper gains bolstered trade prospects for the metal’s top-producing nation.
The peso strengthened 0.7 percent to 474.25 per U.S. dollar as of 11:36 a.m. in Santiago from 477.78 yesterday, heading for the strongest closing price since Sep 9.
Copper, which makes up more than half of Chile’s exports, extended this year’s rally to 15 percent in New York after slumping 21 percent last year. The dollar slid as a Greek austerity package accord cleared the way for a swap to cut the nation’s debt and win its second rescue in two years.
“It’s a combination of three things: the eurozone news; flows from foreign investors betting on the peso, which you can see in the forwards data; and it’s Thursday,” said Osvaldo Cruz, an economist at Banco de Credito e Inversiones in Santiago. “Foreigners increased bets on the peso again, which means more appreciative pressure.”
The Chilean peso generally outperforms the dollar on Thursdays, a day when mining companies sell the proceeds of exports in order to have pesos for paying workers.
Offshore investors in the Chilean peso forwards market trimmed bets against the currency to $4.3 billion on Feb. 7 from $4.5 billion on Feb. 6, according to central bank data. They have increased bets on the currency by $1.3 billion in the past month.
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