Chilean peso rises as copper inventories fall

After global stockpiles of copper -- Chile's biggest export -- fell near a 14-year low, the Chilean peso climbed for the first time in three days.

The Chilean peso rose for the first day in three after global stockpiles of copper, Chile's biggest export, fell near a 14-year low.

Copper inventories at the London Metal Exchange warehouses fell for the 16th straight session, a report showed. Chile is the world's largest producer of the metal, used in power cables and electric wiring in autos and houses.

''Demand is likely to remain very strong for copper,''

pushing prices higher, said Ricardo Amorim, head of Latin America research at WestLB AG in New York.

``This will be supportive to the Chilean peso.''

The peso advanced 0.1 percent to 611.13 per dollar at

2:27 p.m. in New York from 611.90 late Wednesday.

Versus the U.S. currency, the peso is up more than 6 percent since reaching its low for the year of 652.85 on June 10.

LME stockpiles fell 1,675 tons, or 2 percent, to 80,450 tons, the exchange said. Demand from China and the U.S., the world's biggest copper users, combined with supply disruptions at the world's two biggest mines to drain stockpiles 85 percent in the past year.

LME inventories fell to 80,175 tons on Aug. 17, the lowest since July 1990.

Copper futures for December delivery rose 65 cents, or

0.5 percent, to $1.288 a pound on of the New York Mercantile Exchange. The contract is up 26 percent this year.

Chile's peso held onto its gains after a report showed industrial production rose at the fastest pace on record in September. Production growth accelerated from 9 percent in August to 12 percent, the Chile National Statistics Institute said in Santiago.

Economists surveyed by Bloomberg News had expected a 6 percent advance, based on the median estimate.

The Mexican peso fell 0.2 percent to 11.53 per dollar from 11.5037 late yesterday, its third decline in four days.

Versus the dollar, the Mexican currency is down 2.6 percent this year, making it the worst-performer among

16 major currencies tracked by Bloomberg.

Mexico's economy will expand by 3.5 percent to 4 percent in 2005 compared with growth of between 3.75 percent and 4.25 percent this year, Mexican Central Bank President Guillermo Ortiz said Wednesday.

Mexico's inflation rate is expected to begin dropping in the second quarter of next year after a jump in commodity prices pushed the annual increase in consumer prices to more than 5 percent in October, Ortiz said at a news conference in Mexico City.