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Chilean Peso Extends Losses Amid Rampant Greenback

  • The US dollar is extending its broad based gains with the Bloomberg dollar index now up 1.05% and registering record highs. Declines in equity and commodity markets are further bolstering the greenback, with risk-tied currencies in the EM space bearing the brunt of the moves.
  • Declines across all LatAm FX, with MXN and BRL continuing their downward trajectory, however the magnitude of the moves largely in line with the USD adjustment.
  • However, CLP, significantly underperforming on the day as a combination of factors continue to provide stiff headwinds. The lack of aggressive action at yesterday’s BCCh meeting, rhetoric ruling out immediate currency intervention, plummeting copper prices and ongoing domestic political uncertainties related to the upcoming constitutional vote are providing a very bleak short-term outlook amid crashing risk-sentiment across global markets.
  • Argentina inflation data later today, followed by Peru economic activity and Colombian production data to finish the week on Friday.
  • Below gives key levels of LatAm markets in current trade:
    • USDMXN up 1.13% at 20.9688
    • USDBRL up 1.41% at 5.4689
    • USDCLP up 3.1% at 1039.25
    • USDCOP up 1.2% at 4544.09
    • USDPEN up 0.91% at 3.9894
    • Bloomberg Dollar Index up 1.07% at 1303.26
    • USDCNH up 0.93% at 6.7885
    • JPMorgan EM Ccy Index down 1.21% at 48.928
    • S&P E-Mini Future down 75.25 points (-1.98%) at 3730
    • WTI Crude Oil (front-month) down $4.44 (-4.61%) at $91.88
    • Copper Futures down 13.05 (-3.92%) at 319.50

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