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Copper Gains May Further Buoy Chilean Peso

CHILE
  • Buoyant stock markets in the aftermath of the US CPI release and the associated greenback turnaround assisted the move lower for USDCLP on Tuesday. This helps continue the relief rally for the peso following the above-estimate domestic CPI release last Friday and saw USDCLP end the session near the recent lows.
  • Additionally, a 1.58% rally for copper futures on Wednesday may provide a further tailwind for the peso at today’s open. Overall conditions for USDCLP remain bullish and the latest pullback appears to be a correction, for now. However, further weakness could place pressure on the Feb 14 lows at 954.95 and 947.67, the 50-day EMA.
  • The domestic data docket remains empty until next Monday’s fourth quarter GDP and current account balance data. The next BCCh decision is due on April 02.

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