August 29, 2017 / 8:04 PM / a year ago

EMERGING MARKETS-Chile peso touches 2-year high vs dollar as copper soars

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Aug 29 (Reuters) - The Chilean peso on Tuesday
hit the strongest level in over two years as prices of copper
soared, lifted by falling global inventories of the base metal,
a key Chilean export.
    Benchmark copper futures touched levels last seen in
September 2014, extending the previous week's gains.
    Also helping underpin the copper rally was a depreciation of
the dollar against a basket of major currencies after
North Korea launched a missile that flew over northern Japan,
fueling global risk aversion.
    A weaker greenback generally makes dollar-priced metals
cheaper for non-U.S. investors, boosting demand.
    The Chilean peso strengthened about 0.5 percent to
roughly 625 per dollar, leading gains among currencies in Latin
    "We may start to see technical corrections toward 640, but
in general, barring a copper collapse, the peso is heading for
an under-650 closing for the year," 4Cast strategists wrote in a
client note.
    The stronger peso fostered expectations of downward pressure
on inflation, fueling bets that the central bank will further
cut interest rates over the coming months.
    Other regional currencies seesawed as escalating
geopolitical tensions kept investors at bay. 
    The Mexican peso ended the day roughly flat, as 
traders refrained from pushing it even lower following its
biggest loss since April on Monday.
    In Brazil, the real dipped while the benchmark
Bovespa stock index was near flat. 
    Shares of Centrais Elétricas Brasileiras SA were
among the biggest decliners as traders booked profits after a
recent rally triggered by a plan to privatize the
state-controlled power utility.
    Rising shares of power utility Cia Energética de Minas
Gerais SA helped to offset that pressure as it took
further steps to sell its stake in Light SA.

    Key Latin American stock indexes and currencies at 1947 GMT:
 Stock indexes                            daily   YTD %
                                              %  change
                              Latest     change  
 MSCI Emerging Markets          1081.47   -0.33   25.84
 MSCI LatAm                     2877.15   -0.08   23.01
 Brazil Bovespa                71238.53    0.31   18.28
 Mexico IPC                    51308.51    0.08   12.41
 Chile IPSA                     5162.89   -0.16   24.37
 Chile IGPA                    25764.71   -0.17   24.26
 Argentina MerVal              23439.20   -0.18   38.55
 Colombia IGBC                 10891.92   -0.02    7.54
 Venezuela IBC                211166.19    2.17  566.03
 Currencies                               daily   YTD %
                                              %  change
                                 Latest  change  
 Brazil real                     3.1629   -0.03    2.73
 Mexico peso                    17.8670    0.03   16.10
 Chile peso                      625.25    0.51    7.27
 Colombia peso                     2935    0.39    2.27
 Peru sol                         3.239   -0.03    5.40
 Argentina peso (interbank)     17.3850   -0.86   -8.69
 Argentina peso (parallel)        18.24    0.38   -7.79
 (Reporting by Bruno Federowski; Editing by G Crosse and Lisa
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