Copper Prices Surge, Hacienda Continue Dollar Sales

A softer dollar and buoyant risk assets have bolstered the Chilean Peso so far this week with other potential tailwinds lingering for the pair:

• Hacienda confirmed another $120 million sold yesterday bringing the total to $700 million for February.
• Additionally, copper prices have been resurgent as progress toward a U.S. stimulus package brightened the outlook for demand, while supplies continue to show signs of stress. Copper futures rapidly approaching January's best levels at 373.40.
• Regarding vaccines, 776,034 people have now been inoculated.
• Also, as of Thursday, 3 municipalities advance to "initial opening" phase, 13 (7 in the Metropolitan Region, including Santiago) advance to "preparation" phase and will stop having weekend quarantines.

On the other hand, our technical analyst does note the bullish them still intact with initial support at 725.66, Feb 1 low and 711.00 marks the key support, Jan 21 low.

• Also of note, desk have reported daily NDF volumes in the pair have been 30-40% lower than usual since the start of Feb. They cite that bullish CLP positioning may be at risk amid lower liquidity as both onshore and offshore reduce their exposure.