Chilean Peso Surges to Multi-Week High as Copper Rally Fuels Gains

The Chilean peso is trading at 921.66 CLP per USD as of this morning (March 18, 2025), showing a notable strengthening from yesterday’s close. This represents the strongest position for the peso against the dollar in recent weeks, continuing the appreciating trend observed since mid-March.

The Chilean peso gained ground steadily throughout Monday’s trading session (March 17), advancing approximately 0.93% from the previous week’s close. The currency started Monday’s trading at around 930.25 and gradually strengthened throughout the day.

Overnight trading in Asian markets continued to push the peso higher as copper futures rebounded, with the currency breaking through the important psychological barrier of 925 CLP per USD before settling at the current 921.66 level as European markets opened.

Market Drivers and Commentary

Copper Price Rally

The primary driver behind the peso’s strengthening appears to be the recent rally in copper prices, which have climbed to $4.15 per pound, up from approximately $4.00 last week. As the world’s largest copper producer, Chile’s currency maintains a strong correlation with the industrial metal.

Central Bank Positioning

Chile’s central bank stance has contributed to the peso’s stability. The bank has maintained its policy interest rate at 5% since January 2025, providing a relatively attractive yield compared to other emerging markets.

US Dollar Weakness

Market analyst Maria Gonzalez from Santiago Capital noted: “The continued weakness in the USD globally has created a favorable environment for the Chilean peso, with markets now firmly expecting three interest rate cuts from the Federal Reserve this year.”

The US dollar has dropped substantially this month, back to November levels as the US also anticipates a milder tariff environment than initially feared, helping emerging market currencies including the Chilean peso.

Trading Volumes and Flows

Trading volumes have been above average this morning, with approximately $450 million exchanged in the spot market during the first two hours of trading. ETF flows show increased interest in Chilean assets, with the largest Chile-focused ETF reporting inflows of $28 million over the past week.

Technical Analysis

The USD/CLP pair has broken below the key support level of 923.73 observed earlier this month, suggesting potential for further peso strengthening. The current price of 921.66 represents a breakthrough of the lower boundary of the trading range (923-945) that had defined the market since early March.

Technical analysts point to the next major support level at 915, with resistance now at the previously broken 923 level.

Market Outlook

Trading Economics had previously predicted the USD/CLP exchange rate to reach 934.22 by the end of this quarter, but the recent strengthening suggests this forecast may need revision.

Industry experts now suggest that if copper prices maintain their momentum and global risk appetite remains strong, the peso could potentially test the 915 level in the coming days. However, caution remains over potential volatility tied to upcoming US economic data releases and Federal Reserve communications scheduled for later this week.

The Chilean economy’s growth projection of 2-2.5% for 2025 by the IMF continues to provide underlying support for the currency’s improved performance.