Chile peso declines as copper slumps
Santiago - Chile’s peso fell the most this year as an unexpected economic slowdown in China lowered the price of copper, dimming the country’s export prospects.
The peso depreciated 0.3 percent to 471.90 per US dollar at 10:06 a.m. in Santiago after dropping 0.5 percent, the biggest intraday decline since December 24.
The peso has weakened 1 percent in five days, the most among major Latin American currencies tracked by Bloomberg.
“The data from China are pressuring all commodity prices down, and investors are seeking refuge in the dollar,” Alexis Osses, an analyst at XDirect Chile in Santiago, said in a telephone interview.
Copper fell to a 17-month low of $3.1935 per pound after China reported that gross domestic product expanded 7.7 percent in the first first quarter from a year earlier compared with 7.9 percent in the last three months of 2012.
The median forecast of economists surveyed by Bloomberg was for 8 percent growth.
China is the world’s largest consumer of copper, Chile’s main export.
Chile’s currency rallied to 467.05 per dollar on April 8, its strongest level since September 2011, spurring speculation the central bank might intervene in the foreign-exchange market to stem its gains.
Policy makers refrained from mentioning intervention in their statement published April 11. - Bloomberg News