USD/CLP Outlook:
The USD/CLP is likely to move sideways as it trades near its recent average but is experiencing volatility within its three-month range. Despite being at 30-day highs, the lack of a clear driver puts resistance on any significant changes.
Key drivers:
• Rate gap: The US Federal Reserve's focus on safe-haven assets amid rising geopolitical tensions contrasts with Chile's stable interest rates, keeping the peso under pressure.
• Risk/commodities: Oil prices have surged due to tensions in the Middle East, increasing global demand for USD, impacting the CLP negatively as Chile is a net importer.
• One macro factor: Upcoming political changes in Chile with José Antonio Kast’s presidency are raising uncertainty, which could affect investor confidence.
Range:
Expect the USD/CLP to drift within the established range, potentially testing low and high extremes due to ongoing volatility.
What could change it:
• Upside risk: A significant escalation in Middle Eastern tensions could lead to stronger USD demand.
• Downside risk: Favorable domestic conditions and political stability in Chile may support the CLP's value.
