USD/CLP to inch higher towards 775.00 by end-September – MUFG

In August the Chilean peso weakened from 760.81 to 771.80 against the US dollar. CLP is set to remain under pressure for the remainder of this year due to elections and FED tapering, economists at MUFG Bank report.

Spread of Delta variant affects the pace of economic recovery, hitting copper 

“Some of the most recent presidential election surveys showed that left-wing candidate Gabriel Boric is leading the polls, although by a tight margin. The expectation for the presidential election will certainly keep playing a role on CLP performance in the coming months. And, given the tight polls, we foresee even higher CLP volatility for the remainder of this year.”

“Copper prices are being hit by potential reduced demand tied to global economic slowdown from the spread of the Delta COVID-19 variant. And in China (the major copper importer), COVID cases have picked up in recent weeks leading to lockdown measures in some parts of the country.”

“We are revising higher our forecast for USD/CLP to 775.00 at the end of September.”