Chile's peso ended stronger versus the dollar Thursday, despite falling international copper prices, as institutional investors sold dollars.
The peso strengthened to CLP467.60 to the dollar, versus Wednesday's close of CLP469.00, while trading in a range of CLP467.60 to CLP470.20.
As Chile is the world's largest copper producer and exporter, accounting for a third of global supply, currency market participants usually keep an eye on New York and London copper prices to gauge export revenue inflows and the general health of the Chilean economy.
Copper prices in London closed at $8,949 a metric ton, 1.3% lower on the day, as the metal failed to maintain the upward momentum of the previous session.
Also, the euro, which had initially risen on the back of the weak U.S. data, pared its gains against the dollar.
As Chile's economy is highly export-dependent and nearly a third of the Andean nation's exports are bound for European ports, the peso often moves in the same direction as the euro does against the dollar.
"In spite of falling copper prices and the euro paring back earlier gains, the peso strengthened as institutional investors, which had been snapping up dollars in recent session, came out selling [dollars]," said currency trader Raul Lopez at bank Penta.
The central bank of Chile, as part of its $12 billion currency intervention program, purchased $50 million Thursday at an average rate of CLP468.35. The central bank has accumulated $4.80 billion so far this year.
In the bond market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended mixed in light over-the-counter trading.
The yield on five-year BCU bonds ended unchanged at 2.62%, while the yield on 10-year BCUs closed at 2.89%, from 2.87% the prior session.
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