What comes next? Chile peso, and economy 2019

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fraggle092
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What comes next? Chile peso, and economy 2019

Post by fraggle092 » Thu May 23, 2019 11:08 am

Good for many forumites, I guess.
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el dólar llegó a $ 700.jpg
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Re: What comes next?

Post by Putenio » Thu May 23, 2019 12:08 pm

My guess is above and below 700 for awhile, then 720.

FWIW I attended an economy lecture- two speakers from Santiago in Puerto Varas, sponsored/hosted by Banco de Chile, and one - Rodrigo Aravena - indicated his predictions for the investment climate were a modest growth around 3%, a 640/1 exchange rate by year's end, and a positive trend on foreign investment across all traditional sectors.

I thought it optimistic on the exchange rate - 700 was more realistic, but we may be north of it by December.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Thu May 23, 2019 3:51 pm

sorry that title was a bit vague as to the subject of the thread.

Yea, this is all trade war related crap. The yellow mop in the white house can not seem to keep his foot out of his mouth, about anything.

Codelco is a bloated dog that should be put down with both barrels, but from a wider copper market that should only add to a supply squeeze going forward.

I really don't see much to indicate the long-term copper price story has changed. Lot's of bla, bla, bla about the trade war affecting copper demand, but China only exports about 4% of the copper to the United States it produces or imports.

Could there be a general slow-down in the Global economy, perhaps. I am just not buying the narrative of the week about any of it. Next week everyone will be panicking about something else. probably a shortage of copper. The global economy was just as screwed up last week as this week.

I am buying coppper miners, rare earth miners, EM bonds, as the the prices dip over all this bs.
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Re: What comes next? Chile peso, and economy 2019

Post by fraggle092 » Thu May 23, 2019 4:05 pm

Yeah, the original title wasn't too clear.

On one hand there's the Chinese Vs Trump spat tending to depress the CLP, but there is the also prospect of reduced output from Chuquicamata as Codelco slowly and expensively converts to underground production.

Any perceived Cu scarcity may tend to push its value upwards with some effect on CLP, who knows? Its happened before.
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Re: What comes next? Chile peso, and economy 2019

Post by Britkid » Thu May 23, 2019 5:41 pm

If these people making the predictions are very smart and experienced, there's maybe a 60% chance they know whether it will go up or down.

If they are not as good, it's more like 50/50. I wouldn't place too much faith in it.

I made my own prediction in early January that the peso would weaken a bit in the thread "China Growth Has Stopped". However after that it actually got stronger and now it's weakening but is about back to where it was when I made the prediction.

I also predicted the copper price would go down in 2019 because of the China economy. However it actually went up to start with then fell back more recently, and now it's about back to where it was when I made the prediction. So the jury is still out on my prediction.

As usual, I notice a very clear correlation between the recent copper declines and the recent peso weakness. Put the graphs next to each other and it's clear.

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Re: What comes next? Chile peso, and economy 2019

Post by nwdiver » Thu May 23, 2019 10:45 pm

The Peso is down, Canadain Dollar has done nothing against the USD and jumped 3-4 % against the CP........
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Re: What comes next? Chile peso, and economy 2019

Post by 41southchile » Fri May 24, 2019 7:19 am

Copper off nearly 10 percent in the last month or so. When well over half your economy relies on pulling minerals out of the ground expect some issues with the current global dynamics. Expect volatility to be the new norm for Chile, diversifying has been talked about for 30 odd years but never eventuates.
I think the economist special report last week is a must read to get a feel of what is going on with China and US (ie what is affecting the rest of the world). The current trade war is not just due to Trump blowing hard, it's all the hawks in government (and in fact not just the hawks, it has wide support), it's all the businesses that have got sick of China promising (for 20 years)to reform, in fact it's even Democrats that are realizing something had to be done (even the Obama admin was getting pissed at China). The whole China US relationship, not just business relationship, has now changed and entered a new stage, this isnt just some commercial spat that will be over in a few months/years.
Trump has gladly taken up the cause, but this is now a lot bigger than Trump, and will continue well beyond Trump , things are now in play that cant actually be reversed due to the new power dynamics and Chinas rise over the last 30 years or so.
Interesting times ahead in the years/decades ahead.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Fri May 24, 2019 9:47 am

I think the whole thing is overblown. in like 2015 to 2016 the economy was tanking, copper was falling through like 2.50 a pound as china tried to devalue the RMB, yet the peso was only briefly touching the 690 to 700 range. copper it currently around 2.70 or so, and the peso hits 700?
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Re: What comes next? Chile peso, and economy 2019

Post by 41southchile » Fri May 24, 2019 10:39 am

admin wrote:
Fri May 24, 2019 9:47 am
I think the whole thing is overblown. in like 2015 to 2016 the economy was tanking, copper was falling through like 2.50 a pound as china tried to devalue the RMB, yet the peso was only briefly touching the 690 to 700 range. copper it currently around 2.70 or so, and the peso hits 700?
For most of the second half of 2015 and into 2016 peso was over 700. Around when copper briefly dropped below 2 bucks and hung around 2.20 for most of 2016 till Trump came in. Lots of changes since 2015 however so not sure if past experiences are any guide.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Fri May 24, 2019 2:53 pm

here is an explanation of why copper demand is not stronger that seems to actually have some basis in reality:

https://uk.reuters.com/article/uk-china ... KKCN1SR1K2

simply, china's housing starts are using iron, while housing completions that use more copper have not yet gotten there. second half is when that should pickup.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Fri May 24, 2019 4:20 pm

codelco is pushing back on that former report:

http://www.mining.com/chiles-codelco-br ... tput-drop/
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Re: What comes next? Chile peso, and economy 2019

Post by Putenio » Wed May 29, 2019 11:58 am

709 today. Will be interesting to see if it closes above 700.

1 United States Dollar equals
709.27 Chilean Peso
May 29, 2:53 PM UTC · Disclaimer
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