Peso forecast to fall 10% after latest default

Investors are anticipating a 10% drop in the Argentine peso after the nation defaulted for the second time in 13 years last week.

Non-deliverable forwards that show traders’ expectations for the peso over the next 90 days fell to 9.15 per dollar on Friday, the weakest in six months, after the country missed a July 30 deadline to pay $539m (€400m) of interest on restructured bonds. In the spot market, where the peso’s level is managed by the central bank, the currency traded at 8.2357.

JPMorgan Chase & says Argentina may act to bolster the peso should it weaken because of the country’s dispute with hedge funds led by Elliott Management.