CAD/CLP Outlook:
The CAD/CLP exchange rate is slightly weaker, but likely to move sideways as it trades 2.6% below its recent average and is within a steady mid-range. The lack of a clear driver suggests limited volatility in the near term.
Key drivers:
• Rate gap: The Bank of Canada's cautious stance on interest rates, combined with the Central Bank of Chile’s maintaining its rate, creates limited advantage for the CAD.
• Risk/commodities: Strong oil prices could support the CAD, but the recent stabilization may temper demand for the currency.
• One macro factor: Chile's inflation data exceeded expectations, which may prompt future adjustments in monetary policy affecting the CLP.
Range:
The CAD/CLP is likely to drift within its recent trading range, showing no strong signs of breaking out.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen CAD demand.
• Downside risk: Continued pressures in Chile's mining sector may lead to further CLP depreciation, impacting exchange rates.