Chile peso gains on strong Brazil markets
www.forbes.com Reuters, 01.13.03, 3:50 PM ET
SANTIAGO, Chile, Jan 13 (Reuters) - Chile's peso <CLP=> firmed slightly on Monday, following the strengthening Brazilian real currency
The currency closed at 711.20/711.70 per U.S. dollar, an appreciation of 0.31 percent compared to 713.40/713.90 on Friday. The real held firm at 3.3 per dollar in early trade. The Brazilian currency is closely watched in Chile.
"Brazilian bonds have gained, which combined with stable markets has led to a strengthening in the peso," said Rodrigo Videla, finance manager of Tanner brokerage.
Brazilian bonds have strengthened since leftist President Luiz Inacio Lula da Silva took office on Jan. 1, buttressed by his pledges to stick to tight fiscal policy.
However traders said the peso's rise was somewhat curtailed by ongoing fears of rising oil prices due to the tense situation in the Middle East and the strike in the world's fifth oil-producing nation, Venezuela. Chile imports more than 80 percent of its crude.
"The markets of Brazil, Argentina and the United States are stable. What is still pressuring (the peso) is the tension over Iraq," said Videla.
Videla predicted that the currency would continue fluctuating between 710 and 715 pesos per dollar as long as there was tension over Iraq.