Oct. 9 (Bloomberg) — Chile’s peso dropped the most in a week as prices for copper, the country’s biggest export, slumped on a strengthening dollar.

The peso weakened 0.6 percent to 554.50 per U.S. dollar from 551 yesterday for its steepest drop since Oct. 2. It declined for a third week.

Copper dropped in New York and London, paring its biggest weekly gain in two months, as the rising dollar cooled demand for the metal as a hedge against inflation. Chile is the world’s largest copper producer. The December futures contract slid 6.05 cents, or 2.1 percent, to $2.838 a pound on the New York Mercantile Exchange’s Comex unit.

“Copper is one of the most important variables for the movement of the Chilean peso,” said Ricardo Gomez, head of fixed-income sales and trading at Larrain Vial SA in Santiago. “Today it fell strongly.”

The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose 1.7 percent to 2.76 percent, according to Bloomberg composite prices.

Colombia’s peso rose 0.7 percent to 1846.42 per U.S. dollar from 1859.50 yesterday, the highest value since August 12.

The yield on Colombia’s 11 percent bonds due in July 2020 was little changed at 8.756 percent, according to the country’s stock exchange.

Peru’s sol rose for a second day, gaining 0.1 percent to 2.8596 per U.S. dollar, from 2.8637 yesterday for its highest value since August 8, 2008.

Argentina’s peso gained 0.1 percent to 3.8288 per dollar, from 3.8313 yesterday.

Venezuela’s bolivar was unchanged at 5.40 per dollar in unregulated parallel market trading, traders said. Venezuelans buy dollars in the parallel market when they can’t get government authorization to purchase them at the official exchange rate of 2.15 per dollar.

Argentina, Chile, Colombia and Venezuela are closed Oct. 12 for a national holiday.