Chile Peso Reverses Loss as Euro Optimism Blunts Copper Decline
Chile’s peso was little changed, recovering from an earlier loss, as optimism that Greek policy makers will agree on budget cuts needed to secure bailout funds offset prospects of slowing Chinese demand for copper.
The peso rose less than 0.1 percent to 479.78 per U.S. dollar as of 11:03 a.m. in Santiago. The currency earlier weakened as much as 0.5 percent to 482.35.
Copper slumped as much as 1.8 percent in New York after China, the biggest buyer of the metal from Chile, said industrial output is likely to slow this quarter. The euro rallied against the dollar after a Greek official said authorities are working on the final draft of the document listing the budget and structural measures required to receive international funding.
“Copper’s falling because of the Chinese trade data,” said Cristian Donoso, a trader at Banchile Corredores de Bolsa SA in Santiago. “The forecasts are very bad and that’s hitting commodities. Meanwhile the rest of the market is waiting for Greece. Everything’s in a holding pattern.”
China is due to publish trade data this week and the median forecast of economists in a Bloomberg survey is that Chinese imports declined in January for the first time in more than two years
The Greek official, who declined to be named, said the document would be discussed by political party leaders supporting the government of interim Prime Minister Lucas Papademos at a meeting later in the day. The official spoke to reporters in Athens.
Greek Prime Minister Lucas Papademos plans to convene the nation’s political leaders to seek consensus on the cuts required for a bailout as European leaders pressed for answers.
Trade data published today by the central bank showed Chile exported $7.6 billion in January, the second-highest monthly total in the country’s history, with copper making up 55 percent. A pound of copper for March delivery slid as much as 1.8 percent on the Comex in New York to $3.794.
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