CAD/CLP Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and lacks a clear driver.
Key drivers:
• The Bank of Canada has maintained its policy rate, while the Central Bank of Chile continues to hold its rate steady, creating a gap that limits CAD strength against CLP.
• Oil prices are currently above average, which supports the CAD, but recent GDP data has stalled any strong upward movement of the currency.
• Chile's inflation is declining, and the central bank's GDP growth forecast has improved, contributing to a robust outlook for the CLP.
Range: Expect movement to drift in the recent range as the CAD struggles to gain traction against the CLP.
What could change it:
• Upside risk: A significant recovery in Canadian GDP or oil prices could strengthen the CAD.
• Downside risk: Any negative developments in trade relations or economic indicators in Canada may pressure the CAD lower.
