USD/CLP Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and trading near the lower end of its range.
Key drivers:
• Rate gap: The Federal Reserve's potential interest rate cuts contrast with the Central Bank of Chile's recent rate reduction, which could weigh on the USD.
• Risk/commodities: Copper prices have surged, bolstering Chile's export revenues and providing support for the CLP amidst higher demand, especially in clean energy.
• One macro factor: The new Chilean president's proposed economic reforms have improved market conditions, contributing positively to the peso’s value.
Range: The USD/CLP is likely to drift within the recent range, given the current trends and mixed signals affecting each currency.
What could change it:
• Upside risk: A surprising increase in U.S. labor market data could lead to a stronger dollar.
• Downside risk: A continued decline in U.S. inflation could prompt deeper Fed rate cut expectations, pressuring the USD further.
