Chile: Chilean peso hits an over-five-year low on falling commodity prices and a weaker domestic outlook
December 3, 2014
The Chilean peso (CLP) has been losing ground against the U.S dollar in recent weeks, continuing the trend began in mid-2013. On 2 December, the peso traded at 615 CLP per USD, which marked the weakest reading since March 2009. The print was 6.8% below the level observed on the same day last month and 15.3% weaker on an annual basis.
The depreciation of the Chilean peso comes as a result of a weaker growth outlook for the domestic economy, as well as higher expectations that the Fed will soon start to hike interest rates. In addition, the sharp decline in metal prices—particularly of copper, Chile’s main export—is also contributing to the weakening of the peso.