Peru’s sol dropped the most in two months and the nation’s benchmark stock index fell as traders bet former army renegade Ollanta Humala may win a presidential runoff and curtail foreign investment.
The sol weakened 0.6 percent to 2.7720 per U.S. dollar at 12:50 p.m. in New York, from 2.7542 on May 27. That’s the currency’s steepest intraday fall since March 28.
The Lima General Index dropped 4.6 percent to 21,339.53, the most in six weeks.
Presidential polls published yesterday showed support for Congresswoman Keiko Fujimori fell, narrowing her lead over Humala before the June 5 vote. Fujimori led by 4.1 percentage points in a poll by Datum Internacional compared with 5.1 percentage points in a May 26 poll. A survey by Ipsos Apoyo showed the candidates in a statistical tie.
Humala pledges to revise Peru’s free trade agreements and change the constitution to strengthen the state’s role in the economy.
“Keiko’s lead was wider last week and the market thought it was more likely she would win,” said Antonio Diaz, a currency trader at Banco Internacional del Peru, the nation’s fourth-largest lender. “After the latest polls, things are looking very tight.”