May 27, 2024 12:14 GMT
Goldman Sachs Expect CLP To Benefit From Further Copper Price Gains
CHILE
- The macro calendar is light in the early part of this week, ahead of April unemployment data on Thursday and the latest activity data for April on Friday, including retail sales, IP and copper production.
- Following last week’s anticipated 50bp BCCh rate cut, USDCLP closed 0.79% lower on Friday, leaving the pair 6.4% lower month-to-date, as the peso has benefitted from the rally in the copper price. Going forward, Goldman Sachs see further upside for copper towards their year-end target of $12,000/t, given a combination of restricted supply and better Chinese demand sentiment, among other factors.
- While they see some vulnerability in CLP in the short term as the spread to US rates continues to narrow, as long as policymakers maintain the recent more restrained pace of easing, they believe CLP should remain connected with the structural increase in copper prices over the medium term.
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