Fynsa
Global uncertainty and Central Bank decisions have redefined the local landscape. In this environment, peso instruments emerge as an attractive alternative for investors.
The dollar remains high in Chile, but fundamentals are starting to line up for a possible break towards $900.
The Chilean peso is particularly vulnerable to a new tariff escalation by the Donald Trump administration, given its direct link to China.
The Central Bank of Chile has resumed the reduction of interest rates, which has led to a greater relevance of the UF and short-term bonds as conservative investment alternatives.
The flow of buying continues to dominate the foreign exchange market, despite sales by both the Central Bank and the Treasury.
Against the backdrop of interest rate cuts by both the Central Bank and the Federal Reserve, it will be particularly important to have clarity on how our currency will move.
The spread between the local rate and the FED rate has been compressed, but the game will continue until we have clarity on the beginning of the rate cut in the US and we discount the level to which the Central Bank will have to adjust rates.
