The strong flow of funds into Chile has helped the peso strengthen against the dollar, despite a not-so-strong rise in copper prices. But the central bank may not allow the currency to continue on this course, says Marcos Buscaglia of Bank of America-Merrill Lynch. The peso is heading closer to the CLP450 and lower per dollar, at which point the central bank intervened in April 2008 and January 2011. Currently, USDCLP is at 483, a drop of 6.8% over the past two months. "An outright FX intervention announcement is more likely than a rate cut in the next two months," he said, adding that such an intervention could happen if easing measures were adopted by the US or Europe.
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