CHILE: USDCLP Remains In Bear-Mode Condition
Mar-06 15:03
- The Chilean peso is outperforming peers today, amid broad dollar weakness and a recovery in copper prices off the session lows. Robust nominal wage data earlier have also provided a tailwind for the peso, which has rallied by a further 0.7% against the dollar today. USDCLP fell to a session low of 922.605 in recent trade, the lowest level since October 07.
- The move narrows the gaps to support at 921.59, the 76.4% retracement of the upleg between Sep 27 ‘24 - Jan 3. A break of this level would expose 891.28, the Sep 27 2024 low.
- After yesterday’s surge, copper has unwound earlier losses and is now trading 0.6% higher on the day at $482/lb, close to recent multi-month highs at $488.5. Gains this week come on the back of Trump’s threat to impose 25% tariffs on copper imports. Copper futures remain in a bull cycle, with sights on $500.0 next.
- After Chile nominal wages rose by a robust 8.3% y/y in January, attention turns to Feb CPI data tomorrow, where the headline rate is expected to edge down to a still above-target 4.7% y/y.
- HSBC says that the data will be important to gauge the lingering impact of recent electricity tariff hikes, a key variable for the BCCh, which has signalled an extended pause to its easing cycle.
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