CLP: Downside Risks

The Chilean peso has continued to weaken, largely, we think, as a result of the decline in the price of copper since mid November 2006 - in line with the view we promoted at CLP527.40/US$ on November 14. From a technical perspective, the unit enjoys key support at CLP544.00/US$. The peso recently broke below this level, but has come back somewhat. A decisive breach of this level, however, could take it to medium-term support at CLP552.00/US$

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