USD/CLP Outlook:
The USD/CLP exchange rate is likely to decrease as it currently trades below its 90-day average and is near recent lows. Concerns in the Chilean economy, particularly from the mining sector and inflation data, are putting additional pressure on the peso.
Key drivers:
• Rate gap: The Federal Reserve's pursuit of high interest rates bolsters the USD, while Chile's central bank has kept rates unchanged, widening the gap.
• Risk/commodities: Ongoing issues within the copper mining sector are negatively impacting the CLP, leading to a weaker currency amid downward pressure from commodity prices.
• Macro factor: Recent inflation data in Chile exceeded expectations, raising concerns about potential revisions to the Central Bank's monetary policies that could further affect the peso.
Range:
Expect USD/CLP to drift lower within its recent 3-month range, characterized by volatility.
What could change it:
• Upside risk: A positive shift in global risk appetite towards emerging markets could bolster the CLP.
• Downside risk: A strong US economic report that highlights continued growth may strengthen the dollar further at the peso's expense.
