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USDCLP Rises Another 3%, Blasts Through 1,000

  • The Chilean Peso has come under significant pressure once again at the open, with USDCLP rising over 3% to record levels above 1,020.
  • The main contributing factor has been the headlines overnight from the central bank as noted in our JPMorgan post earlier. The BCCh doesn’t see a foreign exchange intervention as necessary at the moment with markets able to absorb shocks adequately, the bank said in a statement.
    • Volatility in the currency market hasn’t transferred to other segments of the financial system, which have operated with adequate levels of liquidity.
  • Full statement here:
  • Additional pressures stemming from the downward trajectory for copper prices that have fallen roughly 2.5% on Tuesday and continue to provide an ongoing headwind for CLP.
  • The moves come just one day before the July BCCh meeting. Despite the latest central bank economist survey forecasting a deceleration of the hiking pace to 50bp on Wednesday, the survey also sees the 2022 year-end rate forecast at 10.00% from a prior estimate of 9.50%.
  • Figure 1: Chilean Peso Depreciates Roughly 23% From June BCCh Meeting

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