Mexico, Chile pesos mixed in wake of Greece deal

MEXICO CITY: Mexico's peso slipped on Tuesday on investor wariness about Greece's longer-term prospects after a second bailout package for the heavily indebted country was approved.

Mexico's peso lost 0.76 percent to 12.79 per dollar as investors took profits on recent bets that European officials would broker a bailout deal, traders said.

Euro zone finance ministers finally agreed on a 130-billion-euro ($172 billion) rescue package for Greece after all-night negotiations, averting an imminent, messy default that could ricochet across financial markets. But concerns remained about Greece's ability to pay its debtors.

"The rescue package is going to take away the problem in the coming month but it's not going to end the crisis," said Jorge Gordillo analyst at CI Banco in Mexico City.

Latin American currencies have surged this year partly on expectations the euro zone debt crisis could ease but many analysts now think a Greek bailout provides only a temporary solution and they are now watching wider European debt troubles.

"We are going to end up talking a possible default when another payment comes," he said.

But analysts say that strong US data from the world's largest economy could support the peso in the medium term, even as troubles in Europe weigh.

A string of upbeat reports from the United States has helped lift Latin American currencies in 2012, especially in Mexico where nearly 80 percent of exports are US-bound.

Among the 152 currencies tracked by Thomson Reuters, those of Mexico, Brazil and Colombia have all been among the top six gainers, each adding more than 8 percent.

The Chilean peso firmed 0.16 percent to bid at 481.45 on hopes for higher copper demand, the country's No. 1 export.

Chile's market is benefiting from an announcement over the weekend that China's central bank cut its reserve requirement ratio, boosting lending capacity by an estimated $55.6-$63.5 billion. The move spurred hopes that the world's largest importer of base metals would increase demand in Latin American markets.

"There is a struggle between the boost the peso received on expectations that copper demand will rise and world markets' caution after the Greek accord," said Pablo Donetch, an analyst at XDirect in Santiago.

Peru's sol traded largely unchanged at 2.680 per dollar. In the last session it hit near 15-year highs even after the central bank bought $19 million in the spot market.