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CHILE: BCCh Expected To Cut Again Next Week

CHILE
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  • USDCLP edged down by 0.2% to 930.8 yesterday, as the peso found some support from a pick-up in copper prices. BBVA notes that the last two sessions have seen more balanced flows, reduced upward momentum in USDCLP and lower intraday volatility. Although not fully clean, offshore positioning has reverted towards the middle of the historical positioning range over the last year and a half. The Finance Ministry also continued its USD selling on Thursday with an additional $50mn.
  • For USDCLP, the recent recovery and break of both the 20- and 50-day EMAs undermines a bearish theme and signals scope for an extension higher, towards 951.80, the Sep 10 high. A reversal lower and a move through the 20-day EMA, at 922.34, would signal the end of the latest bull phase and refocus attention on support at 891.28, the Sep 27 low.
  • No domestic macro data are due today, with focus on Monday’s BCCh traders survey, which will be the last scheduled release ahead of the Oct 17 monetary policy meeting. Yesterday’s BCCh economist survey showed that analysts expect another 25bp cut next week.
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  • USDCLP edged down by 0.2% to 930.8 yesterday, as the peso found some support from a pick-up in copper prices. BBVA notes that the last two sessions have seen more balanced flows, reduced upward momentum in USDCLP and lower intraday volatility. Although not fully clean, offshore positioning has reverted towards the middle of the historical positioning range over the last year and a half. The Finance Ministry also continued its USD selling on Thursday with an additional $50mn.
  • For USDCLP, the recent recovery and break of both the 20- and 50-day EMAs undermines a bearish theme and signals scope for an extension higher, towards 951.80, the Sep 10 high. A reversal lower and a move through the 20-day EMA, at 922.34, would signal the end of the latest bull phase and refocus attention on support at 891.28, the Sep 27 low.
  • No domestic macro data are due today, with focus on Monday’s BCCh traders survey, which will be the last scheduled release ahead of the Oct 17 monetary policy meeting. Yesterday’s BCCh economist survey showed that analysts expect another 25bp cut next week.