Chilean Peso Drops on Weak GDP Growth

The Chilean peso fell yesterday as Chile’s economic growth trailed forecasts, reinforcing the view that the central bank will cut interest rates soon.
Chilean gross domestic product expanded 4.1 percent in the first quarter of 2013, below the forecast of 4.5. The economy grew at the rate of 5.7 percent in the fourth quarter of 2012. The peso fell after the news against the dollar, which was weak itself.
Market participants were speculating for some time about an intervention from the central bank. The Central Bank of Chile left interest rate unchanged at its last meeting, but the slowing economic growth gave additional incentive for the bank to lower the rate on its next meeting.
USD/CLP was up 0.45 percent to settle at 483.28.

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