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CLP Spirals on Political Uncertainty, Sinking Copper Prices

CHILE
  • All Latam currencies suffering so far Wednesday - mimicking the price action across other EM FX including ZAR, HUF and PLN ahead of the London close.
  • USDCLP seeing a particularly notable move higher, touching new record levels and extending the price action posted since the beginning of the week. Risk-off remains a key driver as well as the plummeting copper price, which today touched new contract lows for Sep future.
  • Adding to the pressure on Chile, the government's submission of the draft constitution this week has landed poorly with the public, with opinion polling pointing to a rejection of the changes at this September's referendum.
  • On a technical basis, the latest bullish phase has resulted in a break of the major hurdle for bulls at 878.86, the Mar 19 2020 high. This signals scope for a continuation higher and sights are on 969.18, the 1.618 projection of the Mar 29 - May 12 - Jun 3 price swing. Initial firm support is at 897.15, the 20-day EMA.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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