By Andrea Jaramillo
Nov. 11 (Bloomberg) -- Chile's peso fell the most in more than two weeks as a drop in global stocks and commodity prices hurt demand for higher-yielding, emerging-market assets.
The peso also weakened after Fitch Ratings on Nov. 9 lowered the outlook for Chile's foreign and local-denominated debt to stable from positive, saying that ``a global recession will disproportionately affect Chile's small open economy while declining commodity prices will negatively affect its external liquidity position.'' The agency rates the South American nation's debt A, the sixth-highest investment grade level.
``The reversal in commodities is hurting Latin American currencies in general,'' said Cristian Gardeweg, head economist at Celfin Capital in Santiago. ``The global market is very volatile with a certain level of panic.''
The peso plunged the most since Oct. 24, weakening 2.2 percent to 643 per U.S. dollar at 8:37 a.m. New York time, from 629.05 yesterday.
Copper, Chile's biggest export, fell 3.1 percent in New York trading.
The yield for a basket of Chilean five-year peso bonds in inflation-linked currency units, called unidades de fomento, fell 7 basis points, or 0.07 percentage point, to 3.39 percent, according to Bloomberg composite prices.
In Argentina, the peso rose 0.06 percent to 3.3045 per dollar, from 3.3065 yesterday. The yield on the nation's 8.28 percent dollar bonds due in 2033 rose 1 basis point to 21.12 percent.
To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net
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