Chile’s peso climbed the most in a week as copper surged after a better-than-forecast gain in U.S. employment boosted the demand outlook for the Andean nation’s top export.
The peso climbed 0.4 percent to 469.93 per U.S. dollar at the close in Santiago. The gain pushed this week’s advance to 0.6 percent.
Copper soared the most in 18 months after the U.S. Labor Department said non-farm payrolls rose 165,000 last month, beating the median forecast of 90 economists surveyed by Bloomberg. The U.S. is the second-biggest consumer of the metal. Chile’s peso is the second-strongest currency in Latin America in the last 12 months as the country’s stable 5 percent interest rate attracts investors who can profit from the differential in rates between Chile and Europe, the U.S. or Japan.
“Copper is rising fast so we may see stop-losses being triggered and people will start talking about central bank intervention again,” said Eugenio Cortes, head of currency forwards at EuroAmerica Corredores de Bolsa SA in Santiago. “If they do intervene it will only be a better opportunity to earn carry in Chile so it could come back to where it is now.”
Foreign investors in the forwards market had a $5.2 billion short peso position on April 30, down from $6 billion on April 25.