Chile’s peso dropped from a three- week high as a deepening recession in Europe boosted demand for a refuge in the dollar.
The currency depreciated 0.1 percent to 471.21 per U.S. dollar at 10:28 a.m. in Santiago. The peso closed yesterday at 470.65, the strongest level since Jan. 24.
International investors in the Chilean peso forwards market raised their net bets against the currency to $1.9 billion on Feb. 12, a $1.3 billion increase from Jan. 31. Gross domestic product in the euro area fell 0.6 percent in the fourth quarter from the previous three months, the worst performance since the first quarter of 2009.
“The weakness in Europe is worse than expected, and that tends to lead to great caution from investors who seek refuge in the dollar,” said Sebastian Senzacqua, an economist at Bice Inversiones in Santiago.
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