Trade: Short USDCLP – Entry: 950, Target: 900, Stop 985
Trade Rationale: USDCLP is bumping up against the top of the recent 890-955 range, with recent weakness exacerbated by falling copper prices. The move is looking a bit extreme from here, with previous highs into USDCLP980 less justified due to a less dovish BCCh policy setting than expected earlier in the year, and copper prices above the 1Q24 range of USD380-400 (COMEX). Also, the BCCh’s positioning tracker on offshore NDFs shows short CLP positioning at USD6bn. The past high in short CLP positions around March and April 2024 was closer to USD7-8bn. We do not expect it to reach those extreme levels as a large portion of that positioning was driven by regional carry trades that have lost their appeal off the back of higher global FX volatility.