MercoPress, en Español

Montevideo, February 27th 2024 - 01:21 UTC



The Chilean currency at its highest in 16 months: 496 to the US dollar

Tuesday, November 17th 2009 - 12:48 UTC
Full article
Copper, the backbone of Chilean exports also contributed while the US dollar slid globally Copper, the backbone of Chilean exports also contributed while the US dollar slid globally

The Chilean peso rose to its strongest level against the US dollar in 16 months after copper prices and global stocks rallied. The peso climbed 1.1% to 496.6 per dollar during trading and touched 494.15, the strongest since July 2008.

The Chilean peso has gained all but two days during November and during the past month has jumped 10.6% against the US dollar. So far this year the Chilean peso has appreciated 29% against the US dollar after having lost 22.3% to the greenback in 2008.

Copper, of which Chile is the world’s top producer, also helped to strengthen the Chilean currency having climbed to a 13-month high as the dollar slid and Japan’s economy expanded more than forecast. Chile’s revenue from copper exports rose 24% to 2.48 billion US dollars in October from 2 billion a year earlier.

Copper made up 53% of the total value of Chile’s exports last month compared with 42% in 2008. Emerging-market stocks headed for their highest close in 15 months as better-than-expected earnings boosted shares and analysts raised Brazil’s economic growth estimate.

The peso is a “safe haven” among Latinamerican currencies, Barclays Plc said last Friday. The Chilean currency will probably strengthen to 475 per dollar in six months, Barclays said. Chile’s central bank last week refrained from announcing measures aimed at slowing the peso’s appreciation.

Chilean Finance Minister Andres Velasco said that the “(Chilean) government is closely monitoring the evolution of the US dollar”. He added that the budget currently under discussion in Congress anticipates issuing national debt in Chilean pesos to lessen the burden of the US dollar in the domestic market and among exporters.

Funds are flooding Chile since Brazil established a tax to discourage the so called “carry trade” by which investors take loans in low interest countries and have them profit in high yielding assets.

Meantime copper reached a 13-month record in the London Metals market on Monday: 3.03 US dollars per pound, 3% higher than last Friday.

Categories: Economy, International.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!