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CLP remains vulnerable – Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Edinburgh) - Strategist at Rabobank Christian Lawrence sees the Chilean currency under pressure ahead in the year.

    Key Quotes

    CLP remains under pressure as copper prices continue to fall. USD/CLP has rallied 2.5% this year and double that since mid-December”.

    “We cite our view that China is likely to continue slowing and that commodity prices are unlikely to surge higher anytime soon, and this will continue to weigh on CLP in the coming year. Combined with our USD bull view, and together with domestic political stress, this leaves USD/CLP moving higher as the path of least resistance”.

    “Currency weakness has fed through into inflationary pressures, and as a result the Bank raised rates by 50bp during Q4. We expect them to maintain a hiking bias, although this is unlikely to be enough to support CLP”.
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