Chile: Chilean peso strengthens to nearly one-year high in early July
July 7, 2016
After hitting a multi-year low in January, the Chilean peso has recovered somewhat in recent months and appreciated to its strongest value in nearly one year in early July. On 4 July, the currency traded at 657.0 CLP per USD. The print represented a 3.7% appreciation over the same day in June but a 3.1% depreciation in annual terms. Since the beginning of this year, the peso gained 7.3%.
The recent strengthening of the peso is mainly the result of a surge in copper prices at the end of June and in early July. Copper is Chile’s top export and its price is thus strongly correlated with Chile’s currency. On top of this, the appreciating peso also reflects that the U.S. dollar weakened on the back of expectations that the U.S. Federal Reserve Bank will hike interest rates later than previously thought following the UK’s vote to leave the European Union.