CLP/EUR: Clawing Back Losses

Our cautious view of the Chilean peso over the past few months has played out, especially against the euro, which has strengthened sharply over the past week against EM currencies and the US dollar. Since we identified significant resistance for the peso against the euro at CLP655.00/US$ in mid-October, the currency has fallen by 6.9% to CLP699.47/US$. We think a bounce is in order at this point. As the accompanying chart indicates, we see the CLP703.25/EUR level as key support, and we may now see a move toward resistance at CLP675.00/US$, which represents a trendline that has held for the

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