Chile Peso Weakened 3.8% This Week On Euro-Zone Worries

The Chilean peso was volatile in trading Friday, closing weaker and posting a 3.8% decline this week as continued concerns over the euro zone's future offset a solid gain in first-quarter gross domestic product.

The peso ended at CLP506.20 to the dollar versus Thursday's close of CLP504.70. During the session, the peso traded between CLP502.50 and CLP506.80.

The peso traded stronger against the dollar early in the session as the country's better-than-expected 5.6% increase in first-quarter gross domestic product gave some relief to investors and traders.

But worries over the euro zone's economy ahead of this weekend's Group of Eight meeting offset the GDP data.

"I hope some consensus comes out of the G-8 meeting, but everything is so volatile that it's hard to predict what will happen to the peso after this week of losses," said Ronald Volpi, a trader at Euroamerica.

The euro zone's problems continue to weigh on currency, stock, fixed-income and commodities markets.

As Chile produces one-third of the world's copper, the peso often moves in line with that metal's price, which has been declining since early May.

Monday, all local markets will be closed as the country celebrates a national holiday and President Sebastian Pinera will give his annual State of the Nation speech at Congress to open the legislative season.

Ahead of the long weekend, traders closed their positions to avoid exposure Monday.

In the fixed-income market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended mixed in market volatility on the international turmoil.

The yield on five-year BCU bonds closed at 2.28%, down from 2.30% on Thursday, while the yield on 10-year BCUs closed at 2.40%, the same as the previous session.

Colombia Stocks Rise Ahead Of Long Weekend; Peso Weakens

Colombian stocks rose Friday, closing in positive territory for only the second time in the past eight sessions, as investors took advantage of cheaper share prices ahead of a three-day weekend.

The Colcap, considered the bellwether index for the Colombian Stock Exchange, rose 0.49% to end at 1,715.45 points. The index ended the week 3.4% lower.

Colombian markets, businesses and government offices are closed Monday for Day of the Ascension, a religious holiday.

Meanwhile, the Colombian peso fell 0.9% Friday to its weakest closing level since January, at COP1,823 for a dollar, from the previous day's close of COP1,806.

After gaining 10% against the dollar from January through April, the peso has weakened 3.4% in May, due largely to concerns over Greece's debt problems and how it may affect the local economy.

The yield on Colombia's peso-denominated bond due July 2024 closed at 7.152% after ending the previous session at 7.162%.

Mexico's Peso Closes Flat As Pressure From Europe Lingers

The Mexican peso closed practically unchanged against the U.S. dollar Friday as euro-zone troubles kept risk appetite depressed.

The peso was quoted closing in Mexico City at MXN13.8210 to the U.S. dollar, according to Infosel, compared with MXN13.8220 at the close Thursday. The currency closed out a week of losses and is trading at levels not seen since early January.

Tension over the possibility of Greece leaving the euro zone, as its political and debt crisis deepens, and renewed doubts over the health of the Spanish financial system sparked selling pressure on emerging-market currencies.

"Uncertainty in Europe dominates sentiment right now. And that's bad news for a risky asset such as the peso," said Santander economist Rafael Camarena. The Mexican currency has proven very sensitive to Europe's debt crisis and suffered heavy volatility since mid-last year.

As the euro-zone crisis worsens, the peso has lost 8% of its value against the greenback in the last two months, and year-to-date gains have been reduced to an anemic 1%.

Next week, the focus will be on Mexico's inflation data for the first half of May, scheduled to be released Thursday at 10 a.m. EDT.

Chile Peso Weakened 3.8% This Week On Euro-Zone Worries

The Chilean peso was volatile in trading Friday, closing weaker and posting a 3.8% decline this week as continued concerns over the euro zone's future offset a solid gain in first-quarter gross domestic product.

The peso ended at CLP506.20 to the dollar versus Thursday's close of CLP504.70. During the session, the peso traded between CLP502.50 and CLP506.80.

The peso traded stronger against the dollar early in the session as the country's better-than-expected 5.6% increase in first-quarter gross domestic product gave some relief to investors and traders.

But worries over the euro-zone's economy ahead of this weekend's Group of Eight meeting offset the GDP data.

"I hope some consensus comes out of the G-8 meeting, but everything is so volatile that it's hard to predict what will happen to the peso after this week of losses," said Ronald Volpi, a trader at Euroamerica.

The euro zone's problems continue to weigh on currency, stock, fixed-income and commodities markets.

As Chile produces one-third of the world's copper, the peso often moves in line with that metal's price, which has been declining since early May.

Monday, all local markets will be closed as the country celebrates a national holiday and President Sebastian Pinera will give his first annual speech at Congress to open the legislative season.

Ahead of the long weekend, traders closed their positions to avoid exposure Monday.

In the fixed-income market, yields on inflation-indexed Chilean central bank bonds, or BCUs, ended mixed in market volatility on the international turmoil.

The yield on five-year BCU bonds closed at 2.28%, down from 2.30% on Thursday, while the yield on 10-year BCUs closed at 2.40%, the same as the previous session.

USD/PHP Likely Up, Breach 43 As Risk Aversion Spikes

The USD/PHP is likely to rise as risk aversion pervades global markets given worries over Europe's debt crisis, and weak U.S. data. The pair is tipped to breach 43.00 after settling at 42.925 late Thursday. "The peso should open weak. We have news of the downgrade of Spanish banks and regional currencies are weakening against the dollar. But we may see some recovery later if banks expect strong remittance inflows during the weekend," a local bank trader says. Traders expect the USD/PHP to find resistance at 43.15 and support at 42.80.

USD/PHP Higher; 43.20 Resistance Tipped

The USD/PHP is higher, extending its advance for the sixth straight session amid growing concerns over political impasse in Greece. The pair is at 43.04, its highest level since March 26, vs 42.66 late Tuesday in Asia; volume is heavy. "The dollar has been advancing sharply against regional currencies and we are tracking that," says a local bank trader, adding the pair may continue to advance Thursday, with next resistance at 43.20 and support at 42.90.