CLP To Trade Sideways

The Chilean peso's recent break of short-term resistance around CLP517.00/US$ suggests that we could see the unit appreciate further in the coming months before coming up against resistance around CLP490.00/US$. That said, we caution that further weakness in the price of copper, Chile's main export, combined with the possibility of an interest rate cut in the next few months, could see this short-term appreciatory trend reverse over the next few months, with a break below support in the CLP515.00/US$ area being a particularly bearish sign.

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