CLP/US$: Still Loving It

The Chilean peso remains among our favourite regional currencies in the long term, as the economy's strong fundamentals continue to underpin the currency's appeal. However, the surprise currency intervention back in January and a series of external events, such as the Japanese earthquake and the Eurozone sovereign debt crisis, have led us to modestly revise down our 2011 average forecast. We now expect an average exchange rate of CLP465/US$ in 2011, down from CLP460/US$ previously - reflecting the first half of 2011 - while maintaining our bullish 2012 average forecast of CLP450.00/US$, in line with our expectations for the currency's performance going forward.

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