Reuters reported that Chile's manufacturing and copper output soared in August from July and the country's jobless rate sank to its lowest in 6 months buoyed by domestic consumption and increased import demand, primarily from Brazil and the United States.

Chile's stronger than expected economic performance has helped drive its peso currency up more than 9.5% against the US dollar this year. Together with the Hungarian forint, it ranks as the strongest performer against the dollar among the 152 currencies tracked by Reuters.

Early Friday, after the release of the surprisingly strong production data, the central bank warned it was not ruling out intervening in the foreign exchange market, which it did last year, to stem the peso's rise.

According to the National Statistics Institute, following the remarks, the peso retreated against the dollar and was trading about 0.6% lower on the day at about 474 to the dollar. Manufacturing output increased a seasonally adjusted 6.8% in August from July and rose a larger than forecast 3.6% from a year earlier on improved domestic and external demand conditions.

Chile's jobless rate for the June to August period fell to 6.4% on jobs in public administration and defense teaching and mining, easing from May to July's 6.5% level to its lowest since December to February's 6.4% rate.

BICE Inversiones said that we think the data released today shows favorable growth in local activity and doesn't display evident signs of contagion on the back of international problems.

Copper is the backbone of the Chilean economy, making it highly export dependent. But so far it has resisted the fallout of euro zone debt woes and slowing demand from China, its leading copper customer, better than previously forecast.

INE cited improved conditions for external demand are explained by the exports of products like salmon and trout mainly to Brazil and the United States.

Source - Reuters

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