In Chile, economists at Credit Suisse expect CLP stabilization in the near-term, but see scope for USD/CLP to rebound in the 810-840 range as the second round vote in presidential elections comes closer.

Volatility to pick up

“The good performance of the far-right candidate, Jose Antonio Kast, in Sunday’s first round of the presidential elections was taken positively by markets. Uncertainty about the outcome of the second run remains high. The second round will likely be highly competitive, with Kast and Boric having a similar chances of winning.”

“We expect stabilization of the CLP against the dollar in the near term. But we think that as the 19 December run-off approaches, USD/CLP will become more volatile as political noise picks up. It could, in that context, move back to the upper end of our 810-840 target range.”