Bias: bearish-to-range-bound, as the USD/CLP is currently below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The Federal Reserve may implement one to two rate cuts in 2026, while the Central Bank of Chile recently lowered interest rates, widening the gap favoring the CLP.
• Risk/commodities: Rising copper prices are supporting Chile’s export revenue, which strengthens the peso and lowers demand for the USD.
• One macro factor: Recently, the unemployment rate in the U.S. unexpectedly fell, which could influence future Fed policy and strengthen the USD if it leads to stronger labor market conditions.
Range: The USD/CLP is likely to drift within the recent range as market factors unfold, potentially testing the lower extremes.
What could change it:
• Upside risk: A stronger-than-expected U.S. labor report could boost the USD against the CLP.
• Downside risk: An unexpected escalation in geopolitical tensions could weaken the USD further.