The USD to CLP exchange rate has shown notable firmness recently, with the USD trading at 966.5, reflecting a 1.5% increase above its three-month average of 952. Analysts attribute this strength in the dollar partly to rising inflation pressures in the U.S., specifically highlighting the core PCE price index reaching a five-month high of 2.9%. While expectations for a September interest rate cut remain unchanged, there is a general sentiment in the market that traders are recalibrating their expectations for future rate adjustments.
Recent developments from the U.S. could further influence the dollar's trajectory. The impending U.S. Consumer Price Index (CPI) report, which is expected to show a core increase of 0.3% for July, could have significant implications for Federal Reserve monetary policy. Furthermore, geopolitical tensions, such as U.S.-China trade negotiations and global dedollarization trends, are also affecting perceptions of the dollar's value, with some experts predicting a potential long-term depreciation against other currencies.
On the Chilean side, the Central Bank of Chile's decision to reduce interest rates to 4.75% aims to stimulate growth amidst a slower economic momentum. Recent reports indicate that while headline inflation has lessened to 4.1%, core inflation remains steady at 3.8%, suggesting persistent inflationary pressures. These factors may limit the Chilean Peso's capacity to recover significantly against the dollar, particularly as external economic uncertainties continue to loom.
Given current market dynamics, experts suggest that the USD may experience further support in the near term due to internal inflation factors and external geopolitical developments. Meanwhile, the Chilean Peso's performance is likely to remain constrained by local monetary policy responses and ongoing economic growth challenges. The stable trading range of CLP suggests cautious sentiment from both consumers and investors as they navigate these complex market factors.
