Peru Sol Rises Most in Month on Fed Stimulus View; Bonds Gain

Peru’s sol gained the most in a month as demand for emerging-market assets increased after a Federal Reserve official supported a stimulus program.

The sol appreciated 0.7 percent to 2.7060 per U.S. dollar at today’s close, the most since May 3, according to prices from Datatec.

Recent data suggest the U.S. economy isn’t strong enough to justify a reduction in bond buying, Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday. The sol fell to 2.7360 on May 31, its lowest since October 2011, on speculation the Fed will reduce purchases that have buoyed emerging market assets.

“Sensitivity to U.S. economic data is at its strongest,” said Gonzalo Navarro, the head trader at Banco Santander SA’s local unit. Local and foreign dollar supply and banks’ large holdings spurred the sol gains, he said.

President Ollanta Humala held the first of a series of meetings with business leaders to discuss government measures to accelerate investment projects, according to an e-mailed statement from his office.

The yield on Peru’s benchmark sol bond due in August 2020 dropped five basis points, or 0.05 percentage point, to 4.75 percent, according to data compiled by Bloomberg. The price rose 0.32 centimo to 118.52 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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