Chile Peso Gains the Most in Four Weeks Triggering Stop-LossesSebastian Boyd
Chile’s peso gained the most in four weeks as forecasts for a recovery in Chinese growth bolstered the outlook for copper exports.
The currency advanced 0.8 percent to 501.88 per dollar today, the strongest close since July 18.
China’s benchmark stock index reached a three-month high today after Deutsche Bank AG and UBS AG raised their growth forecasts for the world’s second-largest economy. China is the biggest buyer of Chile’s main import, copper. President Barack Obama asked Congress late yesterday to delay a vote on the use of force in Syria, helping boost demand for higher-yielding riskier assets such as emerging-market currencies.
“There was a strong support level at 506 where we closed yesterday, but markets opened a bit better today and that has meant offshore accounts have been selling dollars,” said Cristian Donoso, a trader at Banchile Corredores de Bolsa SA in Santiago. “As we broke through 506, that set off stop-losses from accounts that were long dollars.”
The peso has gained for nine of the past 11 trading sessions. International investors cut their net short position in the currency to a four-month low of $10.2 billion on Sept. 9, according to central bank data published today.