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/CLP is advancing over 0.5% at the start of the week, highlighting support for commodity-linked assets. This boost is backed by statements from China, where the Politburo announced a shift toward a “moderately loose” monetary policy for 2025, accompanied by potential fiscal stimulus and support for real estate and equity markets. These measures aim to mitigate recent economic challenges while pursuing the ambitious goal of 5% GDP growth.
However, the internal economic landscape in Chile presents notable challenges. The country’s trade balance posted a surplus of USD 1.38 billion, below market expectations. Exports dropped to USD 7.94 billion, mainly affected by volatility in copper prices, while imports fell to USD 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 a less accommodative stance, potentially pressuring the Chilean peso. On the other hand, inflation in line with or below forecasts could support the 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.
