USD/CLP Outlook:
The USD/CLP is slightly positive but likely to move sideways as it trades below its recent average and is near its recent highs. This situation reflects the ongoing tariff uncertainty affecting the US dollar.
Key drivers:
• Rate gap: The US Federal Reserve's potential interest rate hikes could draw investors away from the CLP, which is already feeling pressure.
• Risk/commodities: Copper production challenges are weighing heavily on the CLP, diminishing its appeal as higher copper prices typically support the peso.
• One macro factor: Recent inflation data from Chile has surpassed expectations, raising concerns about possible monetary policy adjustments by the Central Bank of Chile.
Range:
Overall, USD/CLP is expected to hold within the recent three-month range, showing slight fluctuations without clear direction.
What could change it:
• Upside risk: A significant easing of tariff concerns could boost USD demand.
• Downside risk: Further difficulties in the mining sector could exacerbate the CLP's depreciation.
