CAD/CLP Outlook: Slightly weaker, but likely to move sideways as the rate is below the recent average and is positioned near recent lows without a clear driver supporting a move.
Key drivers:
• Rate gap: The Bank of Canada has maintained its interest rate, contrasting with Chile's Central Bank holding steady to balance inflation and growth, creating mixed monetary policy signals.
• Risk/commodities: Rising oil prices have recently bolstered the Canadian dollar, but the CAD is currently under pressure as it remains lower than its average.
• One macro factor: Elevated copper prices are positively impacting Chile's export revenues, providing support for the Chilean peso.
Range: CAD/CLP is likely to drift within its recent range, maintaining relative stability as it navigates current pressures.
What could change it:
• Upside risk: A significant increase in oil prices could improve the outlook for CAD against CLP.
• Downside risk: If Chile's upcoming monetary policy meeting results in an unexpected rate cut, it could strengthen the CLP further against the CAD.
