USD/CLP Outlook:
The USD/CLP is likely to increase as it trades slightly above its 90-day average and remains supportive amid heightened geopolitical tensions. The demand for the US dollar as a safe-haven asset is currently significant.
Key drivers:
• Rate gap: The US Federal Reserve is expected to maintain a stronger monetary policy compared to the Central Bank of Chile, placing upward pressure on the USD.
• Risk/commodities: Oil prices are rising due to geopolitical risks, increasing global demand for USD as it is the standard currency in oil transactions.
• One macro factor: The recent wildfires in Chile have raised concerns about economic stability and may weaken the Chilean Peso.
Range:
Expect USD/CLP to hold steady within its recent range, possibly testing previous highs due to ongoing geopolitical concerns.
What could change it:
• Upside risk: A significant escalation in global conflicts could further boost safe-haven demand for the USD.
• Downside risk: Any positive economic developments in Chile could enhance the CLP's strength against the USD.