Chilean Peso Slides as Copper Decreases and World Markets Tumble

Jul. 28 (Bloomberg) –Chile's peso fell from a three-year high as copper slid and global stock markets tumbled.

The peso declined 0.1 percent to 458.05 per U.S. dollar at 12:34 p.m. New York time, from 457.68 yesterday, when it reached its highest level since April 2008.

"The peso is correcting its level after a very strong advance yesterday," Eugenio Cortes, the head currency trader at Benco Penta, said in a telephone interview from Santiago. "Copper is also falling today, which is causing the currency to depreciate."

Copper, which accounts for half of Chile's exports, dropped 0.8 percent on the New York Mercantile Exchange after orders for U.S. durable goods unexpectedly dropped, damping the outlook for metal demand. The MSCI World Index of stocks fell 1.4 percent.

Chile's one-year interest-rate swap rate, which reflects traders' views of future rates, climbed eight basis points, or 0.08 percentage point, to 5.63 percent in New York.