Chilean Peso Depreciates as Copper Tumbles After U.S. Election
Chile’s peso fell as copper, the nation’s top export, tumbled amid concern U.S. President Barack Obama may clash with Congress on policies intended to address the so-called “fiscal cliff” in the world’s largest economy.
The peso fell 0.1 percent to 479.60 per U.S. dollar as of 10:14 a.m. in Santiago after earlier appreciating to 478.3 per dollar.
Copper dropped 1.4 percent on the Comex in New York on concern Obama, who was re-elected yesterday, may fail to reach an agreement with Republican lawmakers as they seek to address the $600 billion in tax increases and spending cuts set to be implemented next year. The dollar rose against major trading partners after European Central Bank President Mario Draghi said risks of inflation in the euro area were very low and that the region’s fiscal crisis was starting to affect Germany.
“The world is weakening, copper and oil are falling, the euro is down and the dollar is stronger,” said Cristian Donoso, a currency trader at Banchile Corredores de Bolsa SA in Santiago. “The deterioration in external markets is now being reflected in the currency.”
Chilean imports reached a record $7.25 billion in October, rising 26 percent from a year earlier, according to data published today by the central bank. Copper exports as a share of total exports reached 60.6 percent, the most since 2010.
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