The Chilean peso is posting significant gains against the US dollar, driven by a notable advance in the commodity market and an increase in copper prices, which recorded their best performance since November with a rise of over 2%.
This strengthening of the local currency takes place in an environment of relative caution among investors ahead of key US inflation data, which could influence the Federal Reserve’s interest rate path.
The USD/CLPย is advancing overย 0.5%ย at the start of the week, highlighting support for commodity-linked assets. This boost is backed byย statements from China, where theย Politburo announcedย a shift toward aย “moderately loose” monetary policy for 2025, accompanied by potentialย fiscal stimulusย and support for real estate and equity markets. These measures aim to mitigate recent economic challenges while pursuing the ambitious goal ofย 5% GDP growth.
However, the internal economic landscape in Chile presents notable challenges. The countryโs trade balance posted a surplus ofย USD 1.38 billion, below market expectations.ย Exports droppedย to USDย 7.94 billion, mainly affected by volatility inย copper prices, whileย imports fellย to USDย 6.56 billion.
In the short term, attention is focused on US inflation data, set to be released midweek. Higher-than-expected inflation could push the Federal Reserve toward aย less accommodative stance, potentially pressuring the Chilean peso. On the other hand, inflation in line with or below forecasts could support theย local currency, reinforcing its recent rebound.
In conclusion, while the Chilean peso has shown resilience supported by the advance in the commodity market, global uncertainties and domestic challenges remain critical factors.
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