SG:Chilean peso declines as principal export copper reaches new low
Bloomberg reported that Chile’s peso slid for the seventh time in eight sessions as the price of the country’s main export copper fell to a 17 month low.
The peso weakened 0.2% to 475.99 per US dollar in Santiago, the lowest closing level since January 1. The currency has weakened 1.9% since closing at an 18 month high on April 8.
Copper is Chile’s biggest export and makes up half of all its sales abroad. The metal has plunged on concern slowing growth in China and the US will curb demand.
China, the biggest buyer of Chilean copper, reported economic expansion that was less than economists expected in the first 3 months of this year as industrial output growth slowed.
Mr Cristian Donoso a trader at Banchile Corredores de Bolsa SA in Santiago said that “The trigger for this sell off was the bad retail sales numbers in the US followed by unwelcome economic data from China over the weekend. That was accompanied by a major fall in the price of copper. The worsening of Chile’s terms of trade means a lower flow of dollars.”
