Chilean Peso Trades at Week High as Cyprus Deal Supports DemandSebastian Boyd
Chile’s peso traded at a one-week high after European leaders reached a $13 billion deal to save Cyprus from a disorderly default that would force it to exit the euro, spurring demand for emerging-market assets.
The peso advanced less than 0.1 percent to 472.53 per U.S. dollar at 10:25 a.m. in Santiago, the strongest level on a closing basis since March 18. Copper, which accounts for more than half of Chile’s exports, fell 0.1 percent to $3.4610 a pound in New York.
“There was a little bit of relief from the Cyprus situation,” said Alejandro Cuadrado, a Latin America currency strategist at Banco Bilbao Vizcaya Argentaria SA in Santiago. “Today’s a stronger start, but the moves are modest.”
Cypriot President Nicos Anastasiades agreed to shut the country’s second-largest bank after negotiations that threatened to rekindle the debt crisis and rattle markets. The European Central Bank had warned it would cut off emergency financing for the country’s banks as soon as today.
The peso reached the strongest level against the country’s major trading partners since at least 1992 in the first two weeks of March, according to the central bank. Investors in Latin American currencies may reduce positions before the Easter holiday weekend, Cuadrado said.