Bias: CAD to CLP is bearish-to-range-bound, as it sits below its 90-day average and in the lower half of the three-month range.
Key drivers:
- Rate gap: BoC policy rate sits near historic lows, while Chile’s rate remains higher, widening the gap in Chile’s favor and reinforcing CLP resilience against CAD losses.
- Risk/commodities: Oil is at 60-day highs and remains volatile, a picture that typically lifts CAD on the back of Canada’s oil exports, though energy swings keep the pair choppy.
- Macro factor: Chile’s December election and reform plans underpin peso strength as investors price in potential deregulation and pension reforms.
Range: Expect the pair to drift within the three-month band, with occasional tests of the lower end as markets digest oil and policy cues, while North American trading hours can amplify small moves.
What could change it:
- Upside risk: Oil-price resilience could lift CAD, nudging CAD/CLP higher.
- Downside risk: Worsening U.S. tariffs on Canadian goods would weigh on CAD and help CLP.