Chilean Peso Finds Footing at 928.51: Volume Surge & Expert Forecasts

The Chilean peso (CLP) is trading at 928.51 per USD as of this morning (March 25, 2025), continuing the weakening trend observed in recent sessions. This represents a marginal increase in the dollar’s value compared to yesterday’s close of 929.37, suggesting a slight recovery for the peso overnight.

Yesterday (March 24, 2025), the Chilean peso exhibited continued weakness against the greenback, extending the depreciation trend that began last week. The USD/CLP rate reached 929.37 during Monday’s session, up from Sunday’s closing rate of 927.73.

Trading volumes were moderate with approximately $180 million exchanged in the first hour – slightly below Friday’s heightened activity when $380 million changed hands in the first two hours.

Overnight Developments

Overnight trading saw minor peso strength as the currency recovered slightly from Monday’s levels. The move comes as Asian markets digested the latest Federal Reserve commentary and global investors repositioned ahead of today’s economic data releases.

The peso managed to gain ground against the dollar despite the continuing trend of ETF outflows, with institutional investors showing a slight preference for the Chilean currency during the Asian trading session.

Key Market Drivers

Federal Reserve Policy: “The Federal Reserve’s hawkish stance late last week continues to reverberate through emerging markets, with the Chilean peso feeling pressure as investors adjust positions accordingly,” notes Miguel Sánchez, FX strategist at Banco Santander Chile. This remains the primary factor behind recent peso weakness.

Copper Prices: As the world’s largest copper producer, Chile’s currency maintains a strong correlation with copper prices, which have stabilized near $4.15 per pound after showing weakness last week. The industrial metal’s price stability has provided limited support for the peso over the past 24 hours.

ETF Flows: Foreign exchange ETFs tracking Chilean assets have reported continued outflows, with approximately $12 million exiting during overnight trading yesterday, extending the negative trend that began last week when $18.5 million left these funds. However, early morning trading today shows signs of this trend potentially reversing.

Central Bank Policy: The Chilean Central Bank’s steady monetary policy stance, with rates maintained at 5% since January 2025, continues to provide underlying support for the currency, offering a relatively attractive yield compared to other emerging markets.

Technical Analysis

The USD/CLP pair is currently trading in the middle of its established March range of 923-945. The 14-day relative strength index (RSI) stands at 43.11, having decreased slightly from yesterday’s 54.6, indicating a potential shift in momentum favoring the peso.

“With the peso testing the 928.50 level this morning, we’re seeing a critical inflection point. The short-term momentum has shifted slightly bearish for the dollar, but the pair remains above the psychologically important 920 level that served as resistance-turned-support last week,” explains Carmen Fuentes, Head of FX Research at BCI Capital, speaking to Reuters this morning.

The 50-Day Simple Moving Average stands at 947.00 while the 200-Day SMA is positioned at 960.04, both well above current prices, suggesting the longer-term trend remains in favor of peso strength despite recent volatility.

Trading Volumes and Market Activity

This morning’s session has started with above-average trading volumes, with approximately $210 million exchanged in the first hour – a 16% increase from yesterday’s activity during the same period.

According to Santiago exchange data, institutional investors appear to be testing the waters with cautious peso buying after last week’s selloff. Market maker Banco de Chile reports widening bid-ask spreads compared to last week, indicating increased uncertainty.

“We’re seeing spreads about 15% wider than normal as market participants hesitate between continuing the dollar’s rally and taking profits at current levels,” notes Fernando Valenzuela, Head of FX Trading at Banco de Chile.

Market Commentary

Analysts remain divided on the peso’s near-term prospects. “The currency has demonstrated remarkable resilience given the broader dollar strength, but remains vulnerable to further Federal Reserve hawkishness,” states Eduardo Martínez, Chief Economist at LarrainVial in comments published this morning.

Gov Capital’s forecast model suggests the USD/CLP could retreat to 921.50 by the end of today’s session, indicating potential for peso recovery, though current market sentiment appears mixed.

“We’re expecting continued consolidation around the 925-930 range for the next few trading sessions, with potential for increased volatility as markets digest this week’s upcoming inflation data,” adds Patricia Núñez, senior technical analyst at Santiago Capital.

Market Outlook

Trading Economics forecasts the Chilean peso to trade at 930.62 by the end of this quarter, suggesting limited additional weakening from current levels. Meanwhile, CoinCodex’s prediction sentiment shows a bearish trend for USD/CLP with a forecast of $926.86, suggesting potential peso strength in coming sessions.

For today’s session, traders expect the USD/CLP to trade within the 926-932 range, with particular attention on upcoming Chilean economic data and any signals from the central bank regarding its monetary policy stance.