Chile's peso Wednesday ended at its weakest level against the dollar since March 30, as institutional investors bought dollars and international copper prices slumped.
The peso ended at CLP478.90 to the dollar, versus Tuesday's close of CLP475.00, while trading in a range
of CLP474.30 to CLP479.20.
Although the peso traded virtually flat early in the session "a steady stream of dollar purchases by institutional investors pushed the peso to break support at CLP475," said Felipe Herrera at EuroAmerica.
Also, falling copper prices, on the back of worries about Europe's sovereign-debt crisis, pressured the peso.
The most active contract, for December delivery, recently fell 1.2% to $3.9225 a pound on the Comex division of the New York Mercantile Exchange.
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.
"If the peso doesn't strengthen tomorrow and we see it above CLP478 [to the dollar], it will likely continue to weaken beyond CLP480 in the short term," said Herrera.
Chile's central bank, as part of its ongoing $12 billion currency-intervention program, purchased $50 million Wednesday at an average rate of CLP475.71 to the dollar. It has accumulated $9.05 billion so far this year.
In the fixed-income market, yields on inflation-indexed Chilean central-bank bonds, or BCUs, ended mixed as investors fretted about the euro-zone's debt troubles.
The yield on five-year BCU bonds ended at 1.97%, from 1.98% Tuesday, while the yield on 10-year BCUs closed at 2.21%, from 2.18% the previous session.
The peso ended at CLP478.90 to the dollar, versus Tuesday's close of CLP475.00, while trading in a range
of CLP474.30 to CLP479.20.
Although the peso traded virtually flat early in the session "a steady stream of dollar purchases by institutional investors pushed the peso to break support at CLP475," said Felipe Herrera at EuroAmerica.
Also, falling copper prices, on the back of worries about Europe's sovereign-debt crisis, pressured the peso.
The most active contract, for December delivery, recently fell 1.2% to $3.9225 a pound on the Comex division of the New York Mercantile Exchange.
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.
"If the peso doesn't strengthen tomorrow and we see it above CLP478 [to the dollar], it will likely continue to weaken beyond CLP480 in the short term," said Herrera.
Chile's central bank, as part of its ongoing $12 billion currency-intervention program, purchased $50 million Wednesday at an average rate of CLP475.71 to the dollar. It has accumulated $9.05 billion so far this year.
In the fixed-income market, yields on inflation-indexed Chilean central-bank bonds, or BCUs, ended mixed as investors fretted about the euro-zone's debt troubles.
The yield on five-year BCU bonds ended at 1.97%, from 1.98% Tuesday, while the yield on 10-year BCUs closed at 2.21%, from 2.18% the previous session.
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