Peso Still Fundamentally Sound

A strong US dollar comeback in recent weeks has stirred up some dust in currency markets, prompting us to look for new clues about the underlying fundamentals driving some of the currencies in our region. The Chilean peso's performance against sterling - which appears to be in freefall - reflects, to some extent, the still sound fundamentals of the Chilean economy. As the accompanying chart illustrates the CLP/GBP cross-rate tends to move in rapid bursts. Previous peso rallies against sterling have seen the unit gain over 20% in one leg since 2005.

To read the full article, please choose one of the following options: