Latin America Currencies: Chile Peso Declines as Copper Sinks

By Drew Benson

Aug. 20 (Bloomberg) -- Chile's peso declined as a slide in copper, the country's biggest export, threatened to curb dollar inflows.

The peso fell for a third day, weakening 0.3 percent to 522.67 per dollar at 12:20 p.m. New York time, from 521.21 yesterday. The peso is down 5 percent in the past month.

Copper futures for December delivery dropped 1 percent today on the Comex division of the New York Mercantile Exchange. An advance in the dollar against most major currencies spilled over into Latin American markets, said Dustin Reid, senior currency strategist with ABN Amro Bank NV in Chicago.

``People are buying dollars across the board, and pretty aggressively,'' Reid said. ``The dollar is up significantly against most of the G-10 and Latin American currency reaction is mostly carryover from that.''

The yield on a basket of five-year Chilean peso bonds in inflation-linked currency units slid 6 basis points to 2.95 percent, according to Bloomberg composite prices.

To contact the reporter on this story: Drew Benson in Buenos Aires at Abenson9@bloomberg.net