CAD/CLP Outlook:
The CAD/CLP exchange rate is likely to decrease as it currently trades below its recent average and is near recent lows, impacted by weak economic signals from Canada.
Key drivers:
• Rate gap: The Bank of Canada has cut rates, contrasting with the Central Bank of Chile's stable policy, creating pressure on the CAD.
• Risk/commodities: Rising oil prices have been beneficial for CAD, but the low positioning in CLP, coupled with uncertainty in the mining sector, weakens the peso.
• One macro factor: Chile's recent inflation data has raised concerns about potential shifts in monetary policy, contributing to downward pressure on the CLP.
Range:
Expect the CAD/CLP to drift within its recent range.
What could change it:
• Upside risk: A strong surprise in Canada’s retail sales could bolster the CAD.
• Downside risk: Continued deterioration in Chile’s mining performance may depress the CLP further.