Chilean Peso Gains as Greece Deal Speculation Counters Copper

Chile’s peso rose, trimming a weekly decline, as speculation European officials were making progress on an aid package for Greece countered a drop in the price of copper, its biggest export.

The peso strengthened 0.1 percent to 484.54 per U.S. dollar at the close in Santiago, from 484.95 yesterday, paring the drop this week to 1.2 percent.

“Dealers and investors are waiting for a positive outcome Monday for a Greek bailout, so the market did not react to the fall in copper,” said Alex Pigatto, a trader at Nomura Securities Inc. in New York.

The euro rose while U.S. Treasuries fell as European leaders expressed optimism they will agree on a Greek bailout. Copper, Chile’s biggest export, fell as much as 2.5 percent amid signs that growth is slowing in China, the world’s biggest user.

The yield on a basket of 10-year central bank bonds in pesos was 5.28 percent and 2.28 percent on the inflation-linked equivalents. One year breakeven inflation fell 6 basis points, or 0.06 percentage point, to 3.12 percent.

Chile’s government will issue a total of $6 billion in domestic bonds from Feb. 22 through Dec. 19 in a bid to sustain “adequate” liquidity and establish local benchmarks, the Finance Ministry said in an e-mailed statement yesterday.

To contact the reporters on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net; Randall Woods in Santiago at rwoods13@bloomberg.net

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

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