Copper up, USD down.

Chile Investment, how to invest in Chile, what to watch out for when investing, economic issues, currency exchange in Chile, and more.
User avatar
rasmataz
Rank: Chile Forum Citizen
Posts: 296
Joined: Tue Jun 30, 2009 12:59 pm
Location: En el campo, Region XIV

Copper up, USD down.

Post by rasmataz » Wed Jan 06, 2021 8:35 am

The Dollar has taken a very steep downturn starting the end of Nov and is still in a current freefall. I attribute it to the price of copper, since the Chinese it seem to be on buying spree again and to the current turmoil with U.S. politics. Any other causes?

Britkid
Rank: Chile Forum Citizen
Posts: 2198
Joined: Wed Dec 05, 2012 6:59 pm
Location: Talagante area, Chile
Contact:

Re: Copper up, USD down.

Post by Britkid » Wed Jan 06, 2021 11:32 am

If I look on NASDAQ, I can see specific increases in copper price Jan 4th and 5th and specific strengthening in the peso vs the dollar Jan 4 and 5th. And if you pull up graphs of the Chilean peso vs the UK pound, euro, yen you see similar graph - i.e. it was the Chilean peso that strengthened on Jan 4th and 5th, not the dollar that weakened. This suggest that this particular week it has been all about the copper price and nothing more.

The correlation is November is not so clear cut, however, so there may have been other things going on there. It looks like the Chilean peso stayed about the same against Yen/Euro/Dollar/pound in November and didn't fully take advantage of the copper price rise in November. Therefore, perhaps some other, separate things happened in November that weakened the peso and counteract the strengthening effect of rising copper price??

December Chilean peso strengthened quite a bit even though the copper price rose only slightly and did so consistently against dollar, yen, pound and euro....so maybe something else happened in Chile that strengthened the peso?

Looks like copper price is at highest since February 2013

The peso is at 690s, which is exactly where it was pre social crisis

So the simple take might be social crisis damaged Chilean peso and copper price high has helped recover all that ground

Source:
https://www.nasdaq.com/market-activity/ ... s/hg%3Acmx
https://www.xe.com/currencycharts/?from ... LP&view=1Y

Britkid
Rank: Chile Forum Citizen
Posts: 2198
Joined: Wed Dec 05, 2012 6:59 pm
Location: Talagante area, Chile
Contact:

Re: Copper up, USD down.

Post by Britkid » Wed Jan 06, 2021 11:37 am

It's pretty likely that the better handling of the pandemic in Asia has helped China/Asia get a bit ahead of the west...or catch up faster if you like...

An interesting question here is if China grows stronger and the US/the West weaker does this benefit Chile?

In a sense of human rights and democracy and freedom of speech this would be bad new for everyone.

In an economic sense, it's a boost for Chile on raw materials, so could be a win? But I'm guessing Chile still has a lot of US investment, so there could be a bad side as well?

Maybe too complicated a question. You could probably spend 3 years writing a PHD on that question and might still miss something and get it wrong.

User avatar
admin
Site Admin
Posts: 22974
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Copper up, USD down.

Post by admin » Wed Jan 06, 2021 3:10 pm

pushing the peso move, in no particular order:

first country in south america to start vaccination, and the only one with fully purchased supply to cover the entire population several times over.

u.s. stimulus money, and a lot more expected

End of the Donald Duck chaos show, especially in trade and geopolitics.

Dems expected to push big green package, that means lithium and copper needed

copper supply has lagged demand for several years, and expected to get worse in coming years.

as bad as chile was hurt economically by the pandemic, it is nothing like the rest of latin america.

oil price has moved higher with the recent opec announcement, and green energy related commodities moved with them. SQM for example is just short of a new all time high today.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
nwdiver
Rank: Chile Forum Citizen
Posts: 3146
Joined: Tue Mar 17, 2009 8:45 pm
Location: Vancouver, BC and Chile where ever it's Summer
Contact:

Re: Copper up, USD down.

Post by nwdiver » Wed Jan 06, 2021 3:10 pm

Yeh the USD has not moved against the CD but CD is down 55 pesos over the last 10 days or so, the peso is on a tear......
It's all about the wine.

User avatar
admin
Site Admin
Posts: 22974
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Copper up, USD down.

Post by admin » Wed Jan 06, 2021 3:16 pm

There is also a lot of end of the year investment repositioning going on.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

papageno
Rank: Chile Forum Citizen
Posts: 609
Joined: Wed Jul 22, 2015 6:46 pm
Location: Colorado & Puerto Varas

Re: Copper up, USD down.

Post by papageno » Wed Jan 06, 2021 4:35 pm

rasmataz wrote:
Wed Jan 06, 2021 8:35 am
The Dollar has taken a very steep downturn starting the end of Nov and is still in a current freefall. I attribute it to the price of copper, since the Chinese it seem to be on buying spree again and to the current turmoil with U.S. politics. Any other causes?
,

Uh, yeah, the US Congress spending newly-printed money at a rate that would make a drunken sailor blush, hence the USD is dropping against other currencies, crypto, gold, and, apparently, copper.

User avatar
admin
Site Admin
Posts: 22974
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Copper up, USD down.

Post by admin » Wed Jan 06, 2021 5:54 pm

well, mabie it is the coup in washington.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

Jamers41
Rank: Chile Forum Citizen
Posts: 304
Joined: Thu Jun 22, 2017 2:11 pm

Re: Copper up, USD down.

Post by Jamers41 » Thu Jan 07, 2021 1:47 pm

Britkid wrote:
Wed Jan 06, 2021 11:32 am
If I look on NASDAQ, I can see specific increases in copper price Jan 4th and 5th and specific strengthening in the peso vs the dollar Jan 4 and 5th. And if you pull up graphs of the Chilean peso vs the UK pound, euro, yen you see similar graph - i.e. it was the Chilean peso that strengthened on Jan 4th and 5th, not the dollar that weakened. This suggest that this particular week it has been all about the copper price and nothing more.

The correlation is November is not so clear cut, however, so there may have been other things going on there. It looks like the Chilean peso stayed about the same against Yen/Euro/Dollar/pound in November and didn't fully take advantage of the copper price rise in November. Therefore, perhaps some other, separate things happened in November that weakened the peso and counteract the strengthening effect of rising copper price??

December Chilean peso strengthened quite a bit even though the copper price rose only slightly and did so consistently against dollar, yen, pound and euro....so maybe something else happened in Chile that strengthened the peso?

Looks like copper price is at highest since February 2013

The peso is at 690s, which is exactly where it was pre social crisis

So the simple take might be social crisis damaged Chilean peso and copper price high has helped recover all that ground

Source:
https://www.nasdaq.com/market-activity/ ... s/hg%3Acmx
https://www.xe.com/currencycharts/?from ... LP&view=1Y
690s is actually lower (stronger peso) than it was when the "estallido social" started.

Jamers41
Rank: Chile Forum Citizen
Posts: 304
Joined: Thu Jun 22, 2017 2:11 pm

Re: Copper up, USD down.

Post by Jamers41 » Thu Jan 07, 2021 1:50 pm

admin wrote:
Wed Jan 06, 2021 5:54 pm
well, mabie it is the coup in washington.
Considering our experience with Latin American history, we should know that doesn't deserve to be called a coup......if it were, it failed spectacularly.

User avatar
tiagoabner
Rank: Chile Forum Citizen
Posts: 1249
Joined: Sat Mar 04, 2017 9:48 am
Location: Concón

Re: Copper up, USD down.

Post by tiagoabner » Thu Jan 07, 2021 1:59 pm

Jamers41 wrote:
Thu Jan 07, 2021 1:50 pm
admin wrote:
Wed Jan 06, 2021 5:54 pm
well, mabie it is the coup in washington.
Considering our experience with Latin American history, we should know that doesn't deserve to be called a coup......if it were, it failed spectacularly.
Trying and being good/succeeding at it are different things, though.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

User avatar
nwdiver
Rank: Chile Forum Citizen
Posts: 3146
Joined: Tue Mar 17, 2009 8:45 pm
Location: Vancouver, BC and Chile where ever it's Summer
Contact:

Re: Copper up, USD down.

Post by nwdiver » Thu Jan 07, 2021 2:44 pm

tiagoabner wrote:
Thu Jan 07, 2021 1:59 pm
Jamers41 wrote:
Thu Jan 07, 2021 1:50 pm
admin wrote:
Wed Jan 06, 2021 5:54 pm
well, mabie it is the coup in washington.
Considering our experience with Latin American history, we should know that doesn't deserve to be called a coup......if it were, it failed spectacularly.
I trying and being good/succeeding at it are different things, though.

Yeh, complete amateurs......
It's all about the wine.

Post Reply