Hedge funds have been contributing significantly to the momentum of copper, main export of Chile, that is already nearing historic highs, affecting the situation of the Chilean peso.

The dollar fell to near the key mark of $940 at the close of this Monday, primarily due to copper extending its rally to nearly historic highs. Meanwhile, investors are gearing up for the Federal Reserve meeting in the United States, with the Chilean market closed for a holiday.

The local parity dropped by $8.41 to $942.29 at the end of the session, according to Bloomberg quotes, after hitting a low of $940 at noon. This means it traded at the lower end of the range it has been moving in for some time, with the ceiling being $980.

The main support for the Chilean peso came from the commodities market, where Comex copper jumped 2.1% to $4.67 per pound, reaching new two-year highs and getting closer to the historic high of $4.73 per pound reached in April 2022. The dollar index dropped 0.3% to 105.62 points.

Copper has been changing the landscape for the local currency after a long period of suffering. A boom in electric vehicles that is sweeping all markets, something that demands a lot of copper, and the surge in data centers are also contributing. This is against a supply that is quite flat, if not slightly declining.

Hedge funds have been contributing significantly to the metal’s momentum. On Comex, their net position reached $7 billion in favor of copper, the largest since May 2021, according to data from the US futures regulator.