Chile’s Peso Gains as German Confidence Data Spurs Risk Appetite
Chile’s peso strengthened the most in three weeks after a higher-than-forecast reading of business confidence in Germany bolstered optimism about global growth and spurred appetite for riskier emerging-market assets.
The peso rose 0.5 percent to 480.77 per dollar at the close in Santiago, the biggest gain since Feb. 2, from 483.25 yesterday. The peso led advances among major Latin American currencies tracked by Bloomberg.
The euro rose as much as 0.7 percent after the Munich-based Ifo Institute said its business climate index climbed to 109.6, its highest reading since July. Economists surveyed by Bloomberg expected the indicator to reach 108.8.
“The confidence figure from Germany pushed the euro and that helped the peso,” Ronald Volpi, head of spot currency trading at Euroamerica Corredores de Bolsa SA, said in a phone interview.
The price of copper, Chile’s main export, fell as much as 1.6 percent on speculation of a slowdown in China, which may crimp demand for the metal.
Chile´s inflation is likely to slow “substantially” this year from 2011, when the rate surged to 4.4 percent, Finance Minister Felipe Larrain told reporters in Santiago today.
Two-year breakeven inflation fell by two basis points to 3.04 percent, while two-year inflation swaps in pesos rose by four basis points, to 4.93 percent. The yield on a basket of 10- year inflation-adjusted bonds rose by one basis point to 2.44 percent.
To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net
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