MercoPress. South Atlantic News Agency

Dollar drops to 2000 level in Chile

The United States dollar dropped to a new record in the Chilean financial market closing the week in the range of 530 pesos, a benchmark unseen since June 2000.

The depreciation of the US dollar is linked to the overall declination of the US currency in world markets which ended this week at its lowest against the Euro since May last year, 1,2541.

Similarly the Brazilian Real which has an important influence in Chile as the region's largest economy, operated strongly against the US dollar closing at 2,34 Reales, the highest in the last three weeks.

Internationally pessimistic forecasts about the short and medium term effects of the "Katrina" hurricane for the United States economy plus the impact in the Gulf of Mexico oil industry which represents 25% of US oil production have plunged the US dollar to new lows.

Expectations are also high about the Federal Reserve Open Market Committee decision when it meets next September 20.

On the other hand the excellent performance of the Chilean economy growing at over 6,5% and with copper close to a maximum 1,80 US dollars per lb have also helped boost the Chilean peso.