Peru’s sol appreciated as speculation that central banks would act to boost growth in Europe and the U.S. added to demand for higher-yield emerging-market currencies.
The sol climbed 0.1 percent to 2.6175 per U.S. dollar according to prices from the local unit of Deutsche Bank AG. That level is the strongest since 1996, data from Peru’s financial regulator indicate. Peru’s central bank today said on its website it had bought $2 million of U.S. currency in the spot market to slow the sol’s advance.
Speculation that the European Central Bank will buy bonds and the U.S. Federal Reserve will add stimulus increased appetite for commodities and emerging-market currencies. Peru’s economy, the fastest-growing in the region, and a benchmark interest rate unchanged at 4.25 percent since May last year make it attractive to investors looking for higher yields than they can find in developed markets
“This doesn’t have much to do with Peru specifically, it has more to do with the external scenario and attitudes to risk- taking and the carry trade,” said Kathryn Rooney Vera, an emerging-market analyst at Bulltick Capital Markets in Miami.
The sol was the only major Latin American currency to appreciate last year. It has gained 3 percent against the dollar this year.
To contact the reporter on this story: Sebastian Boyd in Santiago at firstname.lastname@example.org
To contact the editor responsible for this story: Brendan Walsh at email@example.com