(Bloomberg) The Chilean peso fell to a new intraday low, leading losses among emerging market currencies, as copper prices fell. A local bill proposing a new round of withdrawals from pension accounts burdened the currency even more.
CLP fell 1% with traders still observing 100-day moving average near 820/USD and dollar support near 800/USD as major technical levels.
Copper, Chile's main export product, fell 2.6% along with iron ore on fears that China's efforts to tackle coronavirus outbreaks will hamper the country's fragile economic recovery.
Chilean MP René Alinco introduced a bill for another round of pension withdrawals and said he will only stop pushing it if the government raises the minimum wage. Markets reacted negatively to the idea, as it would further eliminate liquidity and increase the fragility of the country's pension system.
Boric said earlier this year that a new round of pension withdrawals was not in his plans.
Davison Santana is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended to be investment advice.
Some of the information comes from FX traders familiar with the transactions who asked not to be identified because they are not allowed to speak publicly.
Original Note:
Chilean Peso Leads EM Losses on Copper’s Drop, New Pension Bill
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