MercoPress. South Atlantic News Agency

Financial News.

Headlines:
Euro stronger and stronger; Chilean peso stronger against US dollar; Chilean November inflation 0,3%; Argentine consumer prices unchanged in November; Brazilian sports industry immune to economic cycles.

Euro stronger and stronger ?

The Euro is expected to continue soaring this week against the US dollar after having reached last Friday a record 1,345 US dollars. The latest figures from the US Labour Department reporting that the US economy last November created 112,000 new jobs after having achieved 303,000 in October, depressed markets and analysts are talking of the Euro reaching the benchmark of 1,35 US dollars. It is estimated that the US economy to keep unemployment in the range of 5,4%, 5,5% needs 150,000 new jobs per month. Experts indicate that the double massive "deficits", federal budget and trade, have become a burden for the US economy and the President Bush administration target of reversing the tendency and reaching a reasonable equilibrium in the next four years. Since mid October the US dollar has depreciated 9% against the Euro. However analysts also anticipate that the free fall of the US dollar will attract overseas investors shopping and inevitable higher interest rates. The US dollar's problems have also had an impact on other strong currencies such as the pound sterling which has almost reached a new record at 1,935 US dollars, the highest exchange rate since the end of 1992. The Japanese Yen has also revalued (0,7% last week) and now stands at 102,6 yens to the greenback. Next Thursday the Bank of England board meets to decide on interest rates, the basic currently standing at 4,75% Last week the European Central Bank decided to keep basic rates unchanged at 2% in spite of a strong jump in wholesale inflation in the Euro area. The October index, 0,7%, was the highest since February 2001 and reached 4% considering the last twelve months.

Chilean peso stronger against US dollar.

The Chilean currency dropped below the 600 pesos to the US dollar and this week opens at 580 pesos, the lowest since last February 19 (579). The fall of the US dollar in Chilean money markets is in line with world pattern, particularly against the Euro and Japanese Yen following the release of job creation data in the United States, which was far below market expectations. Another factor was the retraction of international oil prices of which Chile is a net importer. Locally the strong international price of copper, Chile's main export has had a positive influence in the country's trade and current account balance sheets. Chilean money markets are also expecting news from the Central Bank after it was revealed that November's inflation was 0,3%, above the 0,1% forecasted. Given the strong consumer recovery of the Chilean economy, fears of inflation, could prompt the Central Bank to raise the basic monetary policy rate, which now stands at 2,15%.

Chilean November inflation 0,3%

Consumer prices in Chile during November increased 0,3%, 2,8% over November 2003 and 2,5% in the last twelve months, according to the latest release from the Chilean Statistics Institute. The main increases occurred in Food 0,9%; Health services 0.6%; Transport 0,2%; Housing equipment 0,3%, while there were contractions in Housing -0,2%; Clothing ? 0,2% and Others - 0,6%, with Education and Leisure remaining unchanged. In the last twelve months the products which had a greater incidence in the Consumer Price Index are: liquid gas; public transport and unleaded gasoline. On the other end items which actually decreased include drinking water rates, used cars and financial services. Regarding transable and non transable items, that is those with and without foreign competition, the November index moved upwards 0,2% and 0,3%, with an annual performance of 2,2% and 2,7%. As to the underlying Consumer price index (without fresh vegetables and fruit, and fuel) during November it expanded 0,2% and 1,4% in the last twelve months. Fresh vegetables and fruit prices increased in November 3,9% but in the last twelve months actually dropped 4,1%. As to fuel, in November the price fell 0,6% but in the last twelve months it soared 21%.

Argentine consumer prices unchanged in November

Consumer prices in Argentina remained unchanged in November compared to October, but have accumulated in the last eleven months 5,2%. The Argentine Statistics and Census Office reports that wholesale prices in November actually dropped 1,3% over October, but are growing at an annualized 6,9%. However the basic food basket, which helps to measure the degree of poverty and indigence in Argentina increased 0,1%. Construction costs jumped 0,5% and 11,2% in the last twelve months. Analysts point out that November data contrast with October when the monthly consumer price index increased 0,4%, but the basic food basket contracted 0,4%. Apparently in October, education, health costs and leisure experienced a strong advance.

Brazilian sports industry immune to economic cycles

The sports industry in Brazil represents 12 billion US dollars annually, according to a report "Atlas del Deporte" released this weekend in Rio do Janeiro. The report indicates that 1,5 million Brazilians depend on the industry with half of them direct jobs. "This is equivalent to 25% of all jobs generated in the construction industry, which only works when there are investments. When crisis, construction virtually stops, but the sports industry never sleeps, even when the country faces a crisis", said Lamartine Da Costa who also collected the data for the report. Mr. DaCosta who is a member of the Research Committee from the International Olympic Committee said that out of a total 180 million Brazilians, 110 million are involved in physical activities of which 13,2 million are sportspeople. The author of the project revealed that 430 volunteers worked collecting data which should help "attract more investments to the industry". "Before we had no statistics information about sports, from now on we do. Leaders of the industry are always looking for sponsors, but who was going to invest without knowing where you put your money?" Mr. DaCosta also concluded that the report should help to change relations between the sports industry and government. "It's time sports representatives stop talking with the President as if they were begging for favours. Sports are great, self sustainable and for Brazil is a rich contribution to its economy", concluded Mr. DaCosta.