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New Lockdowns and Stalling Copper Rally Provides Resistance for CLP

CHILE
  • Headlines that the newly imposed lockdowns and a closing of the borders will not impact copper production or exports has weighed on copper prices and the peso. Despite USDCLP making new lows at 711.23 early in yesterday's session, the Peso had a sharp turnaround and now finds itself back above 720.
  • The most recent surge in Covid cases has put 75% of the nation's population in lockdown and prompted border closures. Strategists have commented that caution is warranted with respect to the peso. Combined with heightened political uncertainty regarding the delay of the April elections and the stalling copper rally, this may not provide the best backdrop for the next leg of the rally to materialise.
  • As a counter to some potential headwinds for the Peso, it is worth noting Hacienda Dollar Sales recommenced with $150 million sold both last Thursday and yesterday.

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