Web Trader MT5
The official currency of Chile, issued by the Banco Central de Chile. Follows a floating exchange-rate system but intervenes occasionally when the rates become disorderly. While the centavo is no longer used in transactions, the smallest denomination in common use is the 1 peso coin.
Chile is the world’s biggest copper producer with about 25% of the world’s copper production. This makes the peso one of the world’s most copper-sensitive currencies: a rise in copper prices tends to cause the CLP to strengthen, while a decline in copper prices tends to cause the CLP to weaken. The correlation is indeed strong that sometimes traders use CLP as a proxy for copper when the FX market offers better access to trading the commodity.
The Banco Central has the task of keeping inflation within 1 percentage point of its 3% target rate. It acts as a benchmark for central bank behaviour in emerging markets in fixed income.
Example: A major mine experiences a disruption in supply and electric-vehicle demand surges, causing copper prices to rise. USD/CLP declines on a higher repricing of export revenues. A trader who is long on CLP and short on the dollar is better off due to the appreciation of the spot, usually, as the underlying commodity trades sharply, so do commodity-sensitive FX.
