Bias: Bearish-to-range-bound: USD/CLP sits below its 90-day average and in the lower half of the three-month range.
Key drivers:
- Rate gap: The Fed is expected to ease toward a neutral stance this year, while Chile’s central bank has already cut rates, narrowing the yield gap that tends to support the dollar.
- Risk/commodities: Copper prices have risen, boosting Chile’s export income and lending some support to the peso.
- One macro factor: December inflation cooled, giving the Chilean central bank room to maintain a lower policy stance.
Range: The pair is likely to hover near the lower end of its three-month range, with occasional tests of the bottom.
What could change it:
- Upside risk: stronger US jobs data or a firmer price trend that keeps the dollar firm.
- Downside risk: a clearer Fed easing path paired with copper-led peso strength.
