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BCCh's Costa On Economic Outlook, USDCLP Holding Onto Gains

CHILE
  • USDCLP retreated back to 815 yesterday amid broad dollar weakness, however, overall is holding on to recent gains following the recent bounce from around 775. Price has traded through the 50-day EMA and a resumption of strength would open 832.75, the Feb 7 high. Initial support is seen at 799.53, the Apr 13 low.
  • Yesterday, BCCh President Rosanna Costa said Chile will see various quarters with declines in economic activity, potentially adding more pressure for social transfers.
    • “Eventually when we will see the downturn of the economy in the second part of the year, obviously we expect that the people will ask for more transfers, and we expect that this help will be very targeted.”
    • Domestic uncertainty is weighing on consumption, investment, as well as the country’s exchange rate.
    • “If we are wrong in our assumptions, we will be fast to correct our assumptions”.

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