Pesos and Protests

National Crisis, Emergencies, and Natural Disasters in Chile; including the experiences of Chile Forum Members have shared in current and in past crisis, as they have assisted each other and Chile. Things will always go wrong. It is how you deal with it that counts, and that starts with information. When things go wrong, this is the place to come to exchange information about what is going on in Chile.
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papageno
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Re: Pesos and Protests

Post by papageno » Tue Nov 05, 2019 6:43 pm

mem wrote:
Tue Nov 05, 2019 4:12 pm
Golden opportunity getting CLP with USD...it hasnt been at these levels for several years and even then the median is several hundred CLP lower if you go back 20 years. Might even be twice as high as the median. Buying US import products with CLP is all time high levels of pain for business owners

There is a strong likelihood that the central bank is going to intervene and knock it way down.
Above 748 on XE just now...

Badbadbad
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Re: Pesos and Protests

Post by Badbadbad » Wed Nov 06, 2019 10:15 am

ok 747 on XE now, is this mean its going down ???

vamoschile
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Re: Pesos and Protests

Post by vamoschile » Wed Nov 06, 2019 11:55 am

I am not a professional FX trader but in my experience working for multiple international companies and dealing with FX rates is that coming back down will take time. My experience is mostly watching the JPY and MXP. I know Chile, Japan, and Mexico have their own distinct problems but I would not anticipate a quick turn around back to the low 700's high 600's. Once the quarterly reports are published about Chile I would imagine we will see another hit to the peso. Also in my experience companies will use this time as a way to break bad news, what I mean is large corporations will general try to play investor games saying everything is fine and we are doing good but deep down they have some issues they are aware of. These companies will see the protests and political unrest as an opportunity to bring to light their problems and try to shift the blame from poor performance/management to the protests and political unrest.

My question to the forum is what can the central bank actually do to help the peso? I read they have 100 billion USD in reserves but can someone explain what they will do with that to help the peso? Monetary policy is not my forte.

Thanks

Badbadbad
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Re: Pesos and Protests

Post by Badbadbad » Wed Nov 06, 2019 11:56 am

well just check, down to 739 just now

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41southchile
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Re: Pesos and Protests

Post by 41southchile » Wed Nov 06, 2019 12:18 pm

vamoschile wrote:
Wed Nov 06, 2019 11:55 am
Also in my experience companies will use this time as a way to break bad news, what I mean is large corporations will general try to play investor games saying everything is fine and we are doing good but deep down they have some issues they are aware of. These companies will see the protests and political unrest as an opportunity to bring to light their problems and try to shift the blame from poor performance/management to the protests and political unrest.



Thanks
Excellent point, this is like a gift for corporations , underperforming assets and inefficiencies in capital can now be brought out into the open or plants and factories be shut down or mothballed and blame it on the unrest . Salmon industry in Quellon is the perfect example, I'm sure there are many others.
I can't decide for you. You'll have to make up your own mind.

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41southchile
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Re: Pesos and Protests

Post by 41southchile » Wed Nov 06, 2019 12:20 pm

Badbadbad wrote:
Wed Nov 06, 2019 11:56 am
well just check, down to 739 just now
Just got 738.22 at Santander
I can't decide for you. You'll have to make up your own mind.

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admin
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Re: Pesos and Protests

Post by admin » Wed Nov 06, 2019 12:46 pm

the central bank has a bunch of levers to pole. they can sell dollars. They can play with their bonds, etc.

The government could also step in and offer some sort of incentive to companies to accelerate repatriating their overseas dollars.

I however have the suspicion that going in to the summer, they let the weak peso go, to help the exporters offset the costs of this mess and stimulate employment.

as for excuses for bad news, everyone seems to have no problem blaming it on the trade war already.

if there is a trade war resolution in the meantime, even a fake trump one, I would expect the price of copper and other commodities to rally. In which case, even if chile is burning to the ground, the peso would see a rip your face off rally. probably closer to the 600 level.
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admin
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Re: Pesos and Protests

Post by admin » Wed Nov 06, 2019 12:57 pm

rember also, the largest public companies in chile, have a lot less exposure to chile than they use to have say 10 or 20 years ago. obviously this is bad for them, but it is hardly their whole show.

I would be surprised if this whole mess ends up hitting any of them with even a 10% drop in full year earnings.

The trade war still did far more damage to the economy than all the little wankers throwing rocks in plaza Italia combined.
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admin
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Re: Pesos and Protests

Post by admin » Thu Nov 07, 2019 2:45 pm

so these guys are projecting a 7% strengthening of the peso in 2020, if the protests are halted.
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Jamers41
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Re: Pesos and Protests

Post by Jamers41 » Thu Nov 07, 2019 3:00 pm

admin wrote:
Thu Nov 07, 2019 2:45 pm
so these guys are projecting a 7% strengthening of the peso in 2020, if the protests are halted.
Who is?

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admin
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Re: Pesos and Protests

Post by admin » Thu Nov 07, 2019 4:10 pm

Jamers41 wrote:
Thu Nov 07, 2019 3:00 pm
admin wrote:
Thu Nov 07, 2019 2:45 pm
so these guys are projecting a 7% strengthening of the peso in 2020, if the protests are halted.
Who is?
obviously some wankers with a crystal ball.
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41southchile
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Re: Pesos and Protests

Post by 41southchile » Mon Nov 11, 2019 12:03 pm

So we are at 757 USD according to XE. Which now means we are now past a 50 percent devaluation since mid 2013, and about 6 or 7 percent since this started?
I can't decide for you. You'll have to make up your own mind.

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