Exchange traded funds tracking Chile’s stock market and the Chilean peso are ramping higher along with copper prices. The country is a major exporter of the industrial metal and is benefiting from the improved outlook on the global economy.
Chile produces one third of the world’s copper and copper sales and taxes from private miners are a significant source of government revenue, reports Pica. The peso saw its strongest close since November 4, reports Sebastian Boyd for Bloomberg Businessweek.
The rally in copper prices has highlighted Chile’s outlook for its market. [The Falling Dollar and Currency ETFs]
Higher copper “supports two things in Chile,” Juan Pablo Castro, an economist at Banco Santander Chile in Santiago said. “One is the peso, and copper is the principal factor behind today’s appreciation, “he said. “The other is the overall economy. Macroeconomic fundamentals are better and that may induce the central bank to be a bit more cautious,” he said on Bloomberg Businessweek.
To gain partial exposure to the Chilean peso, there is the WisdomTree Dreyfus Emerging Currency Fund (CEW). The Chilean peso begins each quarter with a 9% holding; the weighting fluctuates as the currency appreciates or depreciates. The iShares MSCI Chile Index Fund (ECH) is up about 6% over the past three months.
iShares MSCI Chile Index Fund
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.