Chilean Peso Weakens From Two-Week High as Price of Copper Falls

Oct. 16 (Bloomberg) -- Chile’s peso dropped from a two-week high as the price of copper, the nation’s biggest export, decreased.

The peso depreciated 0.1 percent to 472.58 per U.S. dollar at the close in Santiago. It was earlier stronger than 470 for the first time since Sept. 27. Chile’s markets were closed yesterday for a holiday.

The currency has struggled to appreciate beyond 469 to 470 per dollar on concern a stronger peso would prompt the central bank to take action to slow its advance.

“There is strong support at the 470 level, and the market is concerned about moving below that,” said Francisco Schneider, a trader at Celfin Capital SA in Santiago, referring to the dollar. “At one point today, it looked as if we could go to 468, but copper didn’t help. There was profit taking and a strong psychological level the market couldn’t break.” Support is a level where buy orders are clustered.

Copper for December delivery fell to $3.6975 a pound as peso trading was closing at 1:30 p.m. in Santiago. The metal later advanced 0.1 percent.

To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

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