Argentine peso weakens in pre-electoral jitters

lunes 22 de junio de 2009 12:36 ART
 

BUENOS AIRES, June 22 (Reuters) - Argentina's peso currency weakened on Monday to seven-year lows, in informal trade between foreign exchange houses as investors sought dollars ahead of Sunday's mid-term election.

President Cristina Fernandez, who has pushed for a greater state role in businesses and the economy, is seen losing control of Congress in the vote to renew half of the lower house and a third of the Senate.

Since the newly elected deputies and senators will not be seated until December, investors are uncertain about the second half of the year, and some believe Fernandez could use those months to push an interventionist policy.

In trade between foreign exchange houses, as measured by Reuters, the peso ARSB= softened by 0.38 percent to 3.9000/3.9050 per dollar, its weakest level since June 2002.

The peso weakened 0.2 percent to 3.7800/3.7825 per dollar ARS=RASL in formal interbank trade.

"In pre-electoral periods it's expected that people will take dollar positions, and that leads to speculative trades," said one trader.

But the Central Bank's managed float policy rules out any more abrupt movements in the currency, the trader said. (Reporting by Walter Bianchi; Writing by Fiona Ortiz; Editing by Leslie Adler)