USD/CLP is getting close to 900.0000 as low copper prices hurt the Chilean peso and interest rate cuts are coming.

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The Chilean peso is falling apart, and as a result, the USD/CLP is reaching new all-time highs.

CLP has fallen substantially as the Chilean central bank begins to reduce interest rates in response to falling inflation.

Market financial experts expect the Banco Focal de Chile expected to start making 100-point rate cuts before very long.

The Chilean Peso (CLP) keeps on rotting in business sectors, falling more than 5% against the US Dollar (USD) and sending the USD/CLP pair into ten-month highs close 896.0000.

Slides from the CLP discuss decreasing copper demand and rising inflation.

The Banco Central de Chile (BCP) has struggled to maintain interest rates in balance as inflation rapidly recedes from the Chilean economy, resulting in a decline in the Chilean peso’s value against the US dollar for three consecutive months.

In Chile, inflation decreased to an annualized 5.3%, marking a two-year low. The BCP finds itself in the unenviable position of having to intensify rate cuts after the rate of inflation has decreased for nine consecutive months.

The BCP cut its benchmark rate by 75 premise focuses at its September meeting, and market business analysts expect the Chilean national bank might need to start analyzing 100-guide cuts sooner rather than later all together toward help the more extensive economy.

Copper prices continue to fall in the market, falling to $3.71 per pound at the end of the week, down from the high of $4.27 per pound in January.

As China’s economy faces constraints on the downside, copper demand continues to worsen due to weak copper values. Chile, the single largest copper producer in the world, is particularly vulnerable to weak Chinese demand, which keeps the CLP on the weak side.


About the author

Nafees Saifi // entrepreneur, author, trainer, and stocks and FX trader. 
Nafees Saifi is a professional FX trader from, India. Nafees has extensive experience trading commodities, bonds, and equity futures in the Asian, European, and US markets. Nafees holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.


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