Peru Sol Rises to One-Month High as Greek Elections Spur Demand

Peru’s sol rose to a one-month high as concern eased that Greece may be forced out of the euro zone, spurring demand for higher-yielding, emerging-market assets.

The sol gained 0.2 percent to 2.6455 per U.S. dollar at the close in Lima, according to Deutsche Bank AG’s local unit. It was the strongest level since May 8.

“The market has taken the result of the elections in Greece positively, said Antonio Diaz, a trader at Banco Internacional del Peru in Lima. “The sol has basically recovered most of its losses so the pace of appreciation should slow. The currency will probably consolidate around 2.64 this week.”

Peru’s central bank didn’t buy or sell dollars in the spot market today, it said on its website.

Emerging market stocks gained after Greece’s New Democracy and Pasok parties won enough seats in parliament to forge a majority government, easing concern the country was headed for an exit from the 17-nation monetary union.

The sol weakened 2.7 percent last month as concern Europe’s debt crisis is deepening curtailed exports and foreign investments to emerging markets.

The yield on Peru’s benchmark 7.84 percent sol-denominated bond due in August 2020 decreased three basis points, or 0.03 percentage point, to 5.09 percent, according to data compiled by Bloomberg. The price advanced 0.22 centimo to 118.08 centimos per sol.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

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

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