Chile Peso Gains Most in Emerging Markets as Foreign Sales Stallby
Ends six-day losing streak for Latin American currency
Reverts from earlier losses after Dollar Index retreated
The Chilean peso led gains among emerging-market currencies as traders reported a dropoff in selling by international banks.
The peso strengthened 0.8 percent, its biggest increase since April 28, to 689.08 per dollar, snapping a six-day losing streak in which the currency fell 4.3 percent amid signs of economic weakness in China and a drop in the price of copper, the country’s main export. It was the worst performance for all emerging-market currencies in the period after the South African Rand.
"We saw fewer peso sales by foreign banks early in the session, unlike previous days, and the market quickly turned from negative to positive,” said Eugenio Cortes, the head of forward currency trading at brokerage Euroamerica. “It’s a logical correction after several days that the peso weakened versus the dollar.”
Foreign investors have led the selloff in the peso, increasing the position of short bets they have in the currency to $9.47 billion on May 13, the highest since February, according to data from the central bank.