Dec. 3 (Bloomberg) -- Chile’s peso declined as demand for dollars among pension funds overshadowed an increase in factory output in China, the biggest customer for the South American country’s exports.
The peso depreciated 0.1 percent to 481.52 per U.S. dollar at the close in Santiago, paring its rally in 2012 to 7.9 percent, still the biggest among the major Latin American currencies. Copper for March delivery reached the highest in six weeks on a closing basis.
“In a normal environment with these fundamentals, the peso would be at 475 per dollar, but there are flows,” said Felipe Alarcon, an economist at Banco de Credito & Inversiones in Santiago. “Pension funds are buying more dollars because they’re looking at opportunities abroad and adjusting to new rules.”
China’s official manufacturing index rose to the highest level in seven months as new orders and export demand climbed. China imports more Chilean copper than any other country.
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