- Slowing growth in China is undermining demand for copper
- Fed holding rates failed to calm markets for riskier assets
Chile’s peso sank the most since January 2014 as the country’s principal export, copper, led declines in metals.
The peso fell 1.7 percent to 696.15 per U.S. dollar as of 10:54 a.m. in Santiago. Copper which accounts for almost half Chile’s exports, has fallen 5.7 percent in the past four sessions.
Copper fell the most in more than 10 weeks Tuesday after the Asian Development Bank cut its growth forecast for China, the biggest importer of the metal. China’s copper demand growth may slow to 3 percent a year, compared with an average of 13 percent since 2000, Nomura Holdings Inc. analysts wrote in a note to clients Monday.
“The market is concerned about global growth again and that’s hitting copper,” Eugenio Cortes, head of currency forwards at EuroAmerica, said by phone from Santiago. “The risks have come back.”
The U.S. Federal Reserve’s decision to keep borrowing costs on hold last week has helped crimp demand for risky assets by adding to concern that global growth is slowing, he said.
Swap rates in Chile are little changed today.