Chile’s peso weakened as copper declined on concern US authorities have made little progress in talks to avoid automatic tax increases and spending cuts.
The currency depreciated 0.1% to 481 per US dollar at the close in Santiago after falling 0.5%. International investors in the Chilean peso forwards market cut bets against the currency to 6 month low of USD 6.8 billion on November 26th 2012.
The peso and copper pared losses as US President Mr Barack Obama and Speaker of the House John Boehner fueled optimism lawmakers will be able to avert a so called fiscal cliff. Copper for March delivery dropped 0.6% on the Comex in New York to USD 3.531 per pound after earlier falling 1.6%.
Mr Matias Madrid the chief economist at Banco Penta in Santiago said that “The dollar has appreciated versus on external factors. Copper’s falling because there’s uncertainty around the fiscal agreement in the US.”