Tariffs and Copper Prices Pressure Chilean Peso on April 11, 2025

The Chilean peso trades at 987.05 against the US dollar on April 11, 2025, marking a slight 0.02% rise from yesterday’s close. TradingView’s 1-hour chart reveals a tight range, with a low of 986.70 and a high of 987.67, reflecting cautious market activity.

This stability masks deeper pressures on Chile’s currency, driven by global trade tensions and commodity price shifts. Yesterday, the peso climbed from 982.65 to 986.75, a 4.5% drop since late March when it stood at 944.80.

Overnight, profit-taking pulled the rate back to 987.05, as traders awaited US inflation data. The peso’s 1-day return reached 3.54%, with a 5-day gain of 5.12%, yet its 30-day volatility hit 23.4%, signaling uncertainty.

Since peaking at 1007.33 earlier this month, the currency has struggled to regain ground. Global trade tensions fuel this decline, as Trump’s universal tariffs disrupt markets.

Analysts note that these tariffs, targeting Canada, Mexico, and China, raise US inflation fears, strengthening the dollar. Chile, heavily reliant on copper exports, faces additional strain.

Copper prices, forecasted to stay above $4 per pound this year, likely peaked due to a US-China trade war. Chile’s state copper commission warns that slowing Chinese demand could further depress prices, cutting export revenues critical to Chile’s GDP.

Chilean Peso Under Pressure

Domestically, Chile’s economic vulnerabilities worsen the peso’s plight. Near-zero real interest rates, a 2%+ current account deficit, and low foreign exchange reserves at 14% of GDP leave little buffer against external shocks.

The central bank head reported that the peso lost value, interest rates dropped, and the stock market fell after the US tariff announcement. Meanwhile, the iShares MSCI Chile ETF saw $15 million in outflows on April 10, reflecting investor unease.

Technically, the USD/CLP pair shows a V-shaped recovery from 920 in late March, now trading above short-term moving averages. However, the price hovers near the upper Bollinger Band at 987.13, indicating overbought conditions.

Support sits at 982.65, with resistance at 992.01 and a stronger barrier at 1007.33. Analysts predict the pair could hit 1100 in 2025, driven by Chile’s structural weaknesses and dollar strength.

Broader emerging market trends mirror Chile’s struggle, as the Brazilian real weakened to 5.88 and the Mexican peso to 20.89. Safe-haven currencies like the euro, at $1.09, gain ground amid trade uncertainties.

Today’s US Core PPI data, forecasted at 0.30% month-on-month and 3.60% year-on-year, could further bolster the dollar if inflation exceeds expectations. For Chile, a copper price recovery or central bank intervention near 1,000 remains a faint hope against mounting global pressures.

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