Reuters: US Dollar Report: WRAPUP 2-Chile manufacturing, fish, copper output leap; jobless rate down

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WRAPUP 2-Chile manufacturing, fish, copper output leap; jobless rate down Sep 28th 2012, 19:31 Fri Sep 28, 2012 3:31pm EDT * Manufacturing in August soars 6.8 percent vs July * June to August jobless rate eases to 6.4 percent * Copper output in August jumps 11.7 percent vs July * World No. 1 copper producer performing better-than-expected * Chile peso one of world's strongest performers vs dollar By Antonio De la Jara and Moises Avila SANTIAGO, Sept 28 (Reuters) - Chile's manufacturing soared in August on the back of strong domestic consumption, its fishing industry gained on record demand from Brazil and the United States for Chilean trout and salmon, and copper output rose, the government said on Friday. Chile's stronger-than-expected economic performance has helped drive its peso currency up over 9 percent against the U.S. dollar this year. Together with the Hungarian forint, it ranks as the strongest performer against the dollar among the 152 currencies tracked by Reuters. After the release of the surprisingly robust production data on Friday, the central bank warned that it was not ruling out intervening in the foreign exchange market, as it did last year, to stem the peso's rise. Following the remarks, the peso retreated, closing 0.76 percent lower at about 474.60 to the dollar. The central bank used a dollar-purchasing program last year to damp down the peso after it appreciated to its highest in more than 2-1/2 years at 465.50 per dollar. Manufacturing output increased a seasonally adjusted 6.8 percent in August from July and rose a larger-than-forecast 3.6 percent from a year earlier on improved domestic and external demand, according to the National Statistics Institute (INE) report on Friday. Chile's jobless rate for the June to August period fell to 6.4 percent on jobs in public administration and defense, teaching and mining, easing from May to July's 6.5 percent level and remaining at a near-historical low. "The very strong August numbers confirm the sustained buoyancy of the Chilean economy, which has surprisingly not shown signs of moderation until now," Goldman Sachs analyst Alberto Ramos said in a note to clients. Copper is the backbone of the Chilean economy, so the economy is highly export-dependent. But so far it has done better than forecast in resisting the fallout of euro zone debt woes and slowing demand from China, its leading copper customer. INE said improved conditions for "external demand are explained by the exports of products like salmon and trout, mainly to Brazil and the United States." While copper accounts for around 60 percent of Chile's export revenue, the commodities-centered country also produces salmon, fruits, wood pulp and wine. August's manufacturing rate was buoyed by a jump in fish fillet output, the INE said. World No. 2 salmon producer Chile is betting on booming Brazilian appetite to boost its key fishing industry as it bounces back from a virus that decimated stocks a few years ago. Domestic demand was boosted by the use of metal-based products, such as railings and fences, in real estate projects, it added. CENTRAL BANK SEEN HOLDING RATE STEADY The central bank is seen holding its key interest rate at 5.0 percent again at its monetary policy meeting on Oct. 18, and it is also seen at that level in three and six months, the bank's fortnightly poll of traders showed on Wednesday. A low unemployment rate, brisk domestic demand and strong economic activity - weighed against a threatening global backdrop - are seen pressuring the bank to keep the rate steady and not reduce it to stimulate economic growth, as has been the case recently in Latin American peers Colombia and Brazil. A Reuters poll had seen manufacturing output grow 1.0 percent in August from a year ago on waning external demand and a strong domestic currency that exporters say dulls their competitive edge globally. The unemployment rate was forecast to have remained unchanged at 6.5 percent, according to the median response of 10 analysts and economists polled by Reuters. Chile's economic activity likely expanded at 6.2 percent in August, its strongest pace in six months, on brisk domestic demand, the country's lynchpin mining sector and a rebound in manufacturing, a Reuters survey showed on Friday. COPPER OUTPUT JUMPS Chile copper output jumped in August, both compared with the same month of last year and with July 2012. Chile produced 462,643 tonnes of copper in August , jumping 7.8 percent from the same month a year earlier due to a low base of comparison and a higher current productive capacity, the government also said on Friday. Copper output in August of last year was hit by the tail-end of a massive strike at world No. 1 copper deposit Escondida, majority-owned by BHP Billiton. Production of the metal rose 11.7 percent in August 2012 from a month earlier, boosted by higher rates of mineral-processing and better ore grades, the INE added. Red metal output sank 8.5 percent in July compared with June on the maintenance of conveyer belts and grinding equipment. Chile, which produces around a third of the world's copper, is struggling to boost its key copper production despite stubbornly dwindling ore grades in old mines, labor action, energy woes and operational troubles. The Andean country produced 3.52 million tonnes of copper in the January to August period, a 4.0 percent increase from the same period of 2011. Chile is seen mining 5.404 million tonnes this year, significantly down from a previous projection of 5.7 million tonnes. But analysts and industry players are increasingly questioning whether Chile will be able to meet its ambitious mining production and investment aims. "Considering that no new operations are due to start before year-end, maintaining August's rhythm would mean an annual output of 5.34 million tonnes (+1.5 percent year-on-year), which is difficult if one takes into account Collahuasi's problems and generalized decreases in ore grades," said Pedro Fuenzalida, a senior analyst with LarrainVial in Santiago. Collahuasi, the world's No. 3 copper mine, expects its red metal output to improve in the second half of the year versus the first six months, but its full-year output will likely still be below last year's, as lower ore grades and accidents hit operations. Chile posted its largest trade deficit in August since the height of the global financial crisis nearly four years ago, as exports of the metal slipped below the $3.0 billion mark for the first time since June 2010. 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