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Montevideo, July 13th 2024 - 16:08 UTC



Record prices for copper plummet the US dollar to new lows against Chilean Peso

Thursday, January 6th 2011 - 12:05 UTC
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Chilean central bank president Jose De Greogrio Chilean central bank president Jose De Greogrio

The US dollar ended 2010 at a record low vis-à-vis the Chilean peso which has soared on the strong global demand for copper, the country’s main export. On Friday December 31st the US dollar was operating at 467.30 and 467.80 in Santiago’s money markets, which is the lowest since May 19, 3008 with 467.40.

Market analysts estimate the US dollar could still fall to 465 pesos during the first weeks of 2011, but then would tend to stabilize at 470 pesos. The US dollar has lost 8.5% of its value (approximately 40 Chilean pesos) against the Chilean currency in the last twelve months.

However the sustained appreciation of the Chilean peso has triggered demands and protests from the farming sector, among others, that has seen income from exports drop dramatically while costs increase.

The Chilean central bank president Jose De Gregorio has said he “does not discard an intervention in the foreign exchange market if it is necessary”. Under the previous Socialist administration the central bank implemented measures to boost locally the US dollar and help non copper exporters.

Copper closed Friday at its highest price ever in the London Metals Exchange having reached 4.41776 USD the pound for grade A. This means that the average price for 2010 is now 3.41978 USD the pound, which represents a 46% increase over the average price of 2009: 2.34217 USD.

The lowest price this year was June 8 at 2.76283 USD and comparing the two December 31sts the advance was equivalent to 32.58%.

Market experts forecast the price of copper will continue to rise in spite of the latest measures adopted by China, the world’s largest consumer of the red metal, mostly exported from Chile.

Categories: Economy, Latin America.

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