CLP/US$: At The Whim Of Global Policy

The recent bout of global risk aversion has triggered a significant sell-off in the Chilean peso in recent trading, and without strong policy statements from both the US and Eurozone in the coming days, the unit could see further weakness ahead. Despite our still-positive outlook for the Chilean economy, we believe that as global headwinds continue to gather and investor sentiment grows increasingly wary of the world economy's ability to withstand another shock - stemming primarily from the ongoing eurozone sovereign debt crisis - the peso is likely to come under continued depreciatory pressure in the near term.

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