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Chile Peso Extends January Gain as China’s Exports Boost Copper

Jan. 10 (Bloomberg) -- Chile’s peso extended the second-biggest emerging-market rally this month as China’s exports rose more than forecast, boosting the price of copper.

The peso appreciated 0.1 percent to 470.95 per U.S. dollar at the close in Santiago, the strongest level since Sept. 26. Copper, Chile’s biggest export, rose as much as 1.3 percent. The peso extended its gain in January to 1.8 percent, the biggest among 25 emerging-market currencies tracked by Bloomberg after Romania’s leu.

“Commodities are up with the positive data in China,” said Cristian Donoso, a currency trader at Banchile Inversiones in Santiago. “The dollar could fall a bit more, but below 470 pesos per dollar there’s caution. The market becomes a bit more nervous that authorities will step in.”

Finance Minister Felipe Larrain said Jan. 8 that the government was monitoring the exchange rate and shared exporters’ concern about the strength of the currency. The peso rallied that day to a level stronger than 470 per dollar for the first time since October before falling. Chile’s central bank intervened in the currency market in 2008 and 2011, buying dollars to slow gains in the peso.

Chinese exports rose 14.1 percent in December from a year earlier, the most since May and faster than the 5 percent median forecast of economists surveyed by Bloomberg. Copper made up 61 percent of Chile’s exports last month and 83 percent of its exports to China in November.

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

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