Bloomberg Jan 11---Chile’s peso rallied against the U.S. dollar as commodity prices and equities gained, halting a five-day tumble spurred by central bank dollar purchases.
The peso gained 0.6 percent, the biggest advance in five weeks, to 495.55 per dollar as of 9:41 a.m. New York time from 498.77 yesterday.
The central bank on Jan. 3 said it would buy $12 billion of U.S. currency, pushing the peso down 6.6 percent in five days. Stocks in Europe and Asia gained today after Japan joined China in a pledge to buy euro-area bonds and help ease the region’s debt crisis. Copper, Chile’s biggest export, gained as much as 1.8 percent to $4.3395 a pound in New York.
“The world is better today,” said Andres de la Cerda, a trader at Bice Inversiones in Santiago. “The euro’s strong, stocks and futures are positive and copper is higher. We tested 500 yesterday and there was a lot of offer there, so that’s a ceiling. If the bank hadn’t intervened the peso would be at 473 or 475.”
Foreign investors started betting against the Chilean peso in the forwards market on Jan. 7, according to central bank data published today. The net long peso position of foreign counterparties versus Chilean banks turned negative, the biggest bet against the Chilean currency by foreign traders since September. Foreign investors reduced their net bet position on the peso in the forwards market by $1.8 billion in the four days through Jan. 7, central bank data show.
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