Chilean Peso Hits New Lows as Dollar Strength and Local Pressures Weigh

Official data shows the US dollar traded at 950.06 Chilean pesos on July 10, 2025, marking the peso’s weakest level this month.

The peso lost ground for a third consecutive session, with the exchange rate climbing from 943.73 on July 8 to 949.44 on July 9, before reaching Thursday’s close.

The dollar index (DXY) stayed above 97.3, retreating 0.2% on the day but maintaining a firm tone due to ongoing US trade policy actions and uncertainty about Federal Reserve interest rates.

Market participants observed that the peso’s decline reflected both external and domestic factors. The US dollar gained support from persistent global risk aversion, as President Trump’s new tariffs on copperfill imports and Brazilian commodities triggered fresh trade tensions.

These measures affected 21 countries and reinforced the dollar’s safe-haven appeal. The Federal Reserve’s cautious stance on rate cuts and rising US national debt also contributed to the dollar’s resilience.

Chile’s macroeconomic backdrop offered little relief for the peso. The country’s economy expanded by 2.3% year-on-year in the first quarter, slightly above expectations, but growth slowed from the previous quarter.

Manufacturing and agriculture posted gains, while mining contracted by 1%. Domestic demand weakened, with household consumption and investment both declining.

Public spending rebounded, and exports rose, but these improvements failed to offset the peso’s vulnerability to external shocks. Technical analysis of the USD/CLP daily chart reveals clear bearish pressure on the peso.

The pair broke above key resistance levels, with the 50-day and 200-day moving averages confirming the uptrend. The Relative Strength Index (RSI) closed near 58, indicating rising momentum but not yet overbought.

Chilean Peso Slides as Breakout Momentum Builds

The Moving Average Convergence Divergence (MACD) showed positive momentum, with the MACD line above the signal line and histogram bars expanding. Bollinger Bands widened, reflecting increased volatility as the price touched the upper band.

Support levels now sit near 942 and 938, while resistance is established at 950 and 954. Volume analysis confirmed that recent upward moves occurred on higher-than-average trading activity, reinforcing the strength of the breakout.

No significant inflows or outflows in Chilean peso-focused ETFs were reported, and trading volumes in spot markets remained within recent averages.

Market sources attributed the peso’s weakness to a combination of stronger dollar demand, global trade policy uncertainty, and subdued local fundamentals.

Exporters and importers adjusted positions in response to the shifting landscape, but no extraordinary interventions from the Central Bank of Chile emerged.

Traders now watch the Federal Reserve’s upcoming meeting and further US policy announcements for the next direction.

The peso’s recent slide underscores the impact of global and local forces on emerging market currencies. Hard facts point to a market driven by external shocks, technical momentum, and cautious local sentiment.

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