Chile Peso 2017, starts at 665.29

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Re: Chile Peso 2017, starts at 665.29

Post by admin » Tue Oct 17, 2017 4:09 pm

tiagoabner wrote:
Tue Oct 17, 2017 2:43 pm
I'm kind at a loss with the sunflower oil index here. Should it have any kind of relationship with the US/CLP rates, or is it just an extra tidbit tossed alongside the first graph?
That says, "you should have bought sunflower oil instead of dollars".
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Re: Chile Peso 2017, starts at 665.29

Post by tiagoabner » Tue Oct 17, 2017 4:40 pm

Weird, but OK.

I have moved some funds to my US bank account to pay my rent and I will check out tomorrow how it will turn out in terms of exchange rate.

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Re: Chile Peso 2017, starts at 665.29

Post by admin » Tue Oct 17, 2017 6:26 pm

well, just comparing some historical charts, by my eye-ball estimate, the peso should be well below 600 to the dollar, relative to copper over 3.00 a pound.

Pretty much where peso and copper was from about mid 2009 to to jan 2014.

Now granted the run-up in copper has not proven to be sustained yet, but assuming it is, that means the peso should drop at least to the 550 to 600 range. Perhaps lower, but historically at this price of copper we are hanging tight around the 550 range on average. Definitely not 600+.

Let's call it 15% under valued, sometime through the rest of 2018.

Probably add a premium, for election year uncertainty / post-election certainty, of another 15% dragging on the peso.

If I was going to apply this to real estate, or really a lot of other investments, I would say a safe 30% return is possible this year. Real estate however is showing the biggest signs of there being a housing leg and general pent-up demand. Probably a good additional 15% to be made just on real estate over the next say 12-18 months in Chile, assuming you are starting with dollars.

Throw in a central bank that is probably going to lower or maintain interest rates, in the face of everyone else raising interest rates, will eventually light a fire under investment in 2018 as people go looking for something to do with the that money, once the political uncertainty sorts itself out.
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Re: Chile Peso 2017, starts at 665.29

Post by Space Cat » Wed Oct 18, 2017 12:50 am

It sounds like we should pull more into CLP while it's still 620. I was in hopes for a short 650+ jump but welp...

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Re: Chile Peso 2017, starts at 665.29

Post by tiagoabner » Wed Oct 18, 2017 1:55 pm

tiagoabner wrote:
Tue Oct 17, 2017 4:40 pm
I have moved some funds to my US bank account to pay my rent and I will check out tomorrow how it will turn out in terms of exchange rate.
I made the withdrawal today and my card used 597.800095648 for the exchange rate, roughly 4% lower than XE's exchange rate. After crunching some numbers, I will now use Transferwise for this kind of purpose. Even though they charge a small flat fee, I will still save roughly 3% when compared to the exchange rates I'm getting at this moment.

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Re: Chile Peso 2017, starts at 665.29

Post by eeuunikkeiexpat » Wed Oct 18, 2017 2:01 pm

Sounds like your card has a perhaps a 3% fee for international ATM use? On US cards, this is built-in to the total amount of the transfer whereas the Chile side fee is a separate line item. My experience with both Plus and Cirrus systems for 16 years has been 85%+ of the time less than a point from the real time xe.com rate the main exceptions being big movement days and this is not a big movement day AFAI can see.
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Re: Chile Peso 2017, starts at 665.29

Post by tiagoabner » Wed Oct 18, 2017 2:02 pm

It was not meant to have fees on the US side. I have used the same card previously on Chile and in other countries and I didn't experience this. Going to get in touch with them, this week was crappy in terms of dealing with banks.

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Re: Chile Peso 2017, starts at 665.29

Post by mem » Thu Oct 19, 2017 2:53 pm

admin wrote:
Tue Oct 17, 2017 6:26 pm
well, just comparing some historical charts, by my eye-ball estimate, the peso should be well below 600 to the dollar, relative to copper over 3.00 a pound.

Pretty much where peso and copper was from about mid 2009 to to jan 2014.

Now granted the run-up in copper has not proven to be sustained yet, but assuming it is, that means the peso should drop at least to the 550 to 600 range. Perhaps lower, but historically at this price of copper we are hanging tight around the 550 range on average. Definitely not 600+.

Let's call it 15% under valued, sometime through the rest of 2018.

Probably add a premium, for election year uncertainty / post-election certainty, of another 15% dragging on the peso.

If I was going to apply this to real estate, or really a lot of other investments, I would say a safe 30% return is possible this year. Real estate however is showing the biggest signs of there being a housing leg and general pent-up demand. Probably a good additional 15% to be made just on real estate over the next say 12-18 months in Chile, assuming you are starting with dollars.

Throw in a central bank that is probably going to lower or maintain interest rates, in the face of everyone else raising interest rates, will eventually light a fire under investment in 2018 as people go looking for something to do with the that money, once the political uncertainty sorts itself out.
Oy, perish the thought. The China credit impulse should start kicking in in Nov, so maybe, just maybe we will see 640-660 again even with the copper price.

We'll just have to see how things shakeout

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Re: Chile Peso 2017, starts at 665.29

Post by RuneTheChookcha » Thu Oct 19, 2017 10:28 pm

Would be funny to track both of these on the same chart.

1. Golden Dragon China Portfolio (PGJ) 1yr
pgj.png
2. USD/CLP 1yr
usdclp.jpg

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Re: Chile Peso 2017, starts at 665.29

Post by admin » Fri Oct 20, 2017 8:28 am

The real question is the u.s. fed reserve.

Can they raise interest rates without spooking the natives?

They dont have a good history of doing that, and the u.s. markets are spooky high right now. The stock valiations right now were only beat by the .com bubble, and we all know how that ended when the fed taised rates.
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Re: Chile Peso 2017, starts at 665.29

Post by admin » Fri Oct 20, 2017 8:33 am

By the way, chile's ipsa market broke the 5500 this week. Up 33% in peso terms and like 44% in dollar terms this year.

Everyone is calling it a new historical high, but i seen a calculation some time back that worked out with things like inflation and exchange rate ajustments, it really needs to go 6000+ to be at a true historical high.
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Re: Chile Peso 2017, starts at 665.29

Post by admin » Wed Dec 27, 2017 12:54 pm

Well in the home stretch for 2017, and we are at 616 today thanks to the copper bounce.
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