The current market bias for the USD to CLP exchange rate is bearish.
Key drivers include the interest rate differential, as the Central Bank of Chile recently cut rates to the lowest point in four years while the Federal Reserve is expected to eventually ease rates. Additionally, the unexpected drop in U.S. unemployment supports dollar strength, although geopolitical tensions could weigh on the USD. Meanwhile, declining inflation in Chile is boosting the peso, with recent month-over-month decreases fueling optimistic projections.
The near-term trading range for USD/CLP is expected to remain stable but could face volatility due to external factors. Potential upside risks include unexpected Federal Reserve hawkishness, which could bolster the dollar, while downside risks revolve around worsening geopolitical tensions that could further advantage the peso, particularly amid favorable commodity price trends.