By Felipe Barragán, Expert Research Strategist at Pepperstone
October 8, 2025 –
“The peso strengthened marginally even as global risk tone stayed fragile, but its underlying driver set remains copper, policy path, and the U.S. macro backdrop. On the commodity side, copper is hovering near recent multi-month highs as supply disruptions—from Indonesia’s Grasberg accident to scattered output issues in Chile—keep the market tight. That combination has nudged LME/COMEX benchmarks higher in early October, cushioning CLP against swings in the broad dollar. For a copper-levered FX like the peso, a still-elevated metal price is the single most supportive factor in the near term.
Domestically, the immediate focus is tomorrow’s CPI print, which lands just ahead of the late-October Monetary Policy Meeting. Headline inflation has been easing year-on-year, but with core stickiness flagged in the September IPoM, a higher than expected monthly read would reinforce expectations that the Central Bank holds the MPR later this month, preserving Chile’s still-positive real-rate buffer versus some peers—a relative support for CLP in a world where the Fed is expected to ease. Conversely, a lower CPI would revive rate-cut speculation for December and dull that carry cushion.
Externally, the U.S. government shutdown is now deep into its second week, adding an unusual data vacuum and a layer of uncertainty to global markets. That’s been dollar-supportive at times via safe-haven channels, yet it also increases odds that the Fed leans dovish if activity signals soften when official data flow resumes. The same risk mix has propelled gold to fresh records today—a handy barometer of macro anxiety—which tends to cap how far EM FX can rally on “good copper” alone. Net-net, the shutdown narrative and Fed-cut expectations are pulling in opposite directions for the dollar and, by extension, CLP.
On flows, Chile’s trade backdrop remains constructive: September posted a solid surplus, consistent with stronger mining exports earlier in the year. A steady external balance doesn’t immunize CLP from global swings, but it does reduce the need for domestic hedging at stress points—another reason the peso has felt more anchored than in prior bouts of volatility.
Overall, if copper holds elevated and tomorrow’s CPI does not support further cuts, CLP bias leans to stabilization with a mild appreciation impulse, especially if U.S. yields drift lower on dovish Fed pricing. The two risks to that view are (i) a surprise downside in CPI that reopens local easing bets (CLP negative), and (ii) a deterioration in global risk sentiment as the U.S. shutdown drags on (broad USD positive).”