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Peso Surges Ahead Of Key Economic Activity Data On Friday

CHILE
  • Following today’s better-than-expected production data, USDCLP has reached its initial firm support at 963.87, the 20-day EMA. The pair has now retraced 2.68% from Monday’s high at 990.67, supported by the return of USD sales from the finance ministry. USDCLP trend conditions remain bullish, however, and short-term pullbacks are considered corrective at this juncture.
  • Indeed, given its dwindling stock of USD, BBVA believe that USD sales from the finance ministry are unlikely to continue for long, particularly at such a pace. They look to re-engage in CLP short positions, with an entry below 950 in USDCLP.
  • The strong beats of manufacturing production, industrial production and retail sales in January suggests there is some upside risk to tomorrow’s economic activity (Imacec) data. Consensus is currently for a 0.3% m/m increase in activity, which would translate to an annual rate of +0.1% y/y.

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