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CLP Maintains Firm Price Action

CHILE

USDCLP has retreated a further 0.5% to start the session and is approaching the Feb 24 lows at 699.19. A break through this level may target the years lows at 693 from early January. Factors influencing the recent move:

  • Renewed surge in Copper prices. Copper futures (HGA) have rallied over 4% in the past three sessions from around 400 to a high earlier today of 417.65.
  • Analyst forecast upgrades for the local currency, including Goldman Sachs revising their USDCLP forecasts to 690, 670 and 650 on a 3-, 6-, and 12-month basis (from 725, 710, and 700 previously).
  • Slightly more aggressive daily Hacienda dollar supply in April. The pace of $150 million per day left the April total at $1.35 billion sold as of yesterday.
  • Additionally, earlier confirmation from the central bank minutes that a return to conventional policy was 'approaching'.
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