Chilean Peso Strengthens, Driven by Copper and ChinaThe Chilean peso started the week with a solid appreciation of 0.95%, positioning itself as one of the best-performing currencies of the session and reinforcing a positive trajectory that has been consolidating throughout 2025, accumulating a gain of over 7% against the U.S. dollar so far.
Two key factors explain this strong performance of the Chilean peso. First, the broad weakness of the U.S. dollar has facilitated a recovery in CLP. Second, and perhaps equally important, is the exceptional performance of copper, which has registered an increase of nearly 22% so far this year, providing crucial support to the Chilean currency, given the local economy's high dependence on the export of this metal.
In particular, the recent strength of the Chilean peso received an additional boost following the release of a series of positive economic indicators from China, Chile's largest trading partner. At the start of this week, China reported a moderation in the decline of new home prices, marking the slowest drop in the last eight months. Additionally, industrial production exceeded expectations, growing 5.9% year-over-year in January-February, with key sectors such as computing, communication, and automobiles leading the expansion. Another factor positively received by investors is that retail sales accelerated to 4.0%.
Beyond these favorable results, new government measures have emerged to stimulate domestic consumption, including subsidies for families and specific actions to strengthen Chinese consumers. This measure, in my view, is extremely relevant, especially in an environment where China is seeking to diversify its economy, which has experienced development constraints through the real estate sector and faces uncertainty in external demand due to trade tensions with the West. However, if Japan has taught us anything, it is that this process of changing consumer habits can be more complex than initially expected.
Overall, this data is particularly relevant considering the current trade tensions between the United States and China. In fact, if the Chinese economy manages to remain stable despite U.S. trade aggression, this would most likely continue to benefit the Chilean peso.
From an operational perspective, the market is focusing on the 900 Chilean pesos per dollar level, a key level where the currency faced resistance throughout 2024. A confirmation of this movement could open room for further peso appreciation in the short term.
In summary, the current outlook presents a favorable scenario for the Chilean peso, though it will be crucial to closely monitor China's economic developments and the global context, as these are key factors for the continuation of this trend.
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