CAD/CLP Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and mid-range.
Key drivers:
• Rate gap: The Central Bank of Canada has maintained a cautious monetary policy, contrasting with Chile's recent rate cuts aimed at stimulating growth.
• Risk/commodities: Crude oil prices are high, supporting the Canadian dollar's strength, but recent geopolitical tensions with the U.S. have weighed on the CAD.
• One macro factor: Chile’s economy grew robustly in the past year, providing a solid backdrop for the peso amidst ongoing political uncertainties.
Range:
The CAD/CLP is expected to drift within its recent range, given the lack of strong directional drivers.
What could change it:
• Upside risk: Significant improvement in U.S.-Canada trade relations could bolster the CAD.
• Downside risk: A notable decline in oil prices could weaken the CAD further, increasing pressure on the rate.
