Dollar Weakness Boosts Chilean Peso as IPSA Pauses After Rally

According to TradingView data, the peso strengthened to 947.75 CLP per dollar early Wednesday. The currency reversed a 0.3 percent drop seen on Tuesday.

Traders positioned ahead of the Fed’s likely rate cut drove the move. The dollar index fell to a two-month low, easing pressure on emerging market currencies. Local importers sold dollars to lock in rates before quarter-end, adding to peso strength.

The S&P IPSA closed at 9 066.03 points on Tuesday, edging down 0.25 percent. The index gained momentum in August but paused near its 50-day moving average. Volume fell 12 percent, signaling fatigue after recent gains.

Miners led advances, with SQM rising 0.4 percent on stronger lithium prices. Banco de Chile dropped 0.6 percent after reserving higher provisions. Retail stocks held steady, with Falabella adding 0.1 percent on improved sales outlook.

In the last 24 hours, the biggest winners included SQM and Antofagasta. SQM climbed 0.4 percent, while Antofagasta gained 0.3 percent on rising copper and lithium demand.

The top losers were Banco de Chile and Cencosud. Banco de Chile fell 0.6 percent on credit cost concerns. Cencosud slid 0.5 percent after cautious guidance on holiday sales.

Technical analysis on the daily USD/CLP chart shows the pair testing a support trend line near 948 CLP. The 200-day simple moving average aligned with that level, reinforcing its importance.

The MACD histogram turned less negative, and the MACD line approached its signal line, suggesting loss of bearish momentum. The RSI stood at 38, marking mild oversold conditions that often precede short-term rebounds.

Bollinger Bands narrowed, indicating low volatility and a likely near-term breakout. On the four-hour USD/CLP chart, the pair formed a double-bottom pattern near 945 CLP.

The 20-period EMA flattened, and the MACD lines converged, confirming potential reversal. A break above 952 CLP could trigger a test of 960 CLP. Conversely, a drop below 945 CLP could open the way toward 940 CLP.

The global liquidity index, shown as a yellow line on TradingView charts, dipped alongside the dollar index. That index fell 1.5 percent over the past day. Its decline reflects broader risk-on sentiment and portfolio flows into commodities and emerging markets.

ETF flows painted a cautious picture. The iShares IPSA ETF recorded net inflows of US $3.4 million on Tuesday after two straight days of outflows.

Local mutual funds reported CLP 1.1 billion in redemptions, suggesting profit-taking among retail investors. Overall, the peso regained ground as the dollar lost strength ahead of the Fed’s policy decision.

The IPSA paused its rally amid profit-taking and mixed sector performance. Charts point to a short-term peso rebound and a minor pullback in the stock index before key global news shifts market sentiment.