USD/CLP Outlook:
The USD/CLP is likely to decrease, as it currently trades below its recent average and is near recent lows. The overall market uncertainty is keeping the Chilean Peso comparatively stable despite pressures from U.S. tariff discussions.
Key drivers:
• Rate gap: The U.S. Federal Reserve's potential interest rate hikes are more impactful on the CLP than local copper prices, making the peso more sensitive to USD movements.
• Risk/commodities: As copper production estimates decline, the peso has weakened, reducing confidence amid concerns over Chile’s mining sector.
• One macro factor: Recent inflation data in Chile showed higher-than-expected CPI figures, leading to expectations that the Central Bank may need to adjust its monetary policy.
Range:
The USD/CLP may drift lower within its recent range, potentially testing new lows if current pressures persist.
What could change it:
• Upside risk: A surprise dovish stance from the Federal Reserve could lift the USD.
• Downside risk: Escalating trade tensions or new U.S. tariffs could further weaken the USD against the peso.
