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Peso Extends Recovery Amid More Optimistic Backdrop

CHILE
  • With Fed rate cut confidence increasing, the associated benign price action for major equity indices and the buoyancy for copper prices, the Chilean peso is extending the most recent bounce. Indeed, USDCLP has now breached an important support at 935.63, the Mar 15 low.
  • A clear break of this level would highlight a stronger reversal and signal scope for an extension towards 922.80 initially, 50.0% of the Dec 1 ‘23 - Feb 26 bull leg. Key short-term resistance has been defined at 961.08, the Apr 30 high, where a break is required to undermine the developing bearish threat.
  • Chile trade data for April will cross on Tuesday before Wednesday’s release of April inflation, a significant data point ahead of the May 23 BCCh decision.

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