Chile’s currency, the peso, rose Tuesday as copper failed to withstand pressure from a strengthening global dollar and a rapid accumulation of inventories, coinciding with the official start of China’s 15-day Lunar New Year holiday.
The dollar-peso parity rose 2.3 Chilean pesos to 866.3 at the close of trading, moderating an initial surge that brought it to 871 pesos around 12:30 p.m. Local time, settling above its short-term trend line (20-day moving average), according to compiled data from Bloomberg sales desks.
The peso’s movement mirrored the dollar index, which grew 0.3% to 97.2 points, after reaching a 0.7% increase amid a rebound in U.S. Short-term interest rates. Comex copper fell 2.3% to $5.73 per pound, even as gold decreased 2% and silver dropped 3.8%. The New York Stock Exchange initially declined but reversed course later in the day.
The dollar’s strengthening globally was attributed to “preliminary news of an agreement between the United States and Iran, expectations of fewer interest rate cuts by the Federal Reserve in 2026, and some reversal of market positioning against the dollar,” Sebastián Díaz, an economist at Pacífico Research, told DF.
Recent upward surprises in employment data and somewhat more restrictive comments from the Fed have provided some support for dollar interest rates. Progress toward a nuclear agreement between Washington and Tehran “restores some strength to the dollar as the primary global currency,” Díaz explained.
Marco Correa, assistant economics manager at BICE, noted that “commodities are falling in the face of this stronger dollar, and in particular, copper has been pressured downward by a significant accumulation of inventories in major global exchanges. Both factors – a stronger global dollar and falling copper prices – justify an upward reaction in the local exchange rate.”
Visible copper inventories have risen to exceed one million tons for the first time since 2003, largely due to large volumes transferred to the Comex U.S. Exchange.
“This highlights the disconnect between the long-term bullish narrative for copper and current supply conditions. Activity typically slows down before the Lunar New Year, before accelerating in early March. However, this year the market will enter the post-holiday period with abundant supply, suggesting that prices could remain under pressure until demand improves visibly,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“Gold, silver, and copper have started the Lunar New Year week under pressure, with much of Asia – and especially China – closed. The moderation of trading has amplified price movements and highlighted how much the recent recovery depended on Asian participation,” Hansen added.
The dollar-peso parity had closed slightly higher on Monday, amid particularly low global flows, as Chinese markets were already closed for the holiday and the U.S. Observed a federal holiday.
The local derivatives market recently became more “clean,” thanks to a significant unwinding of positions against the Chilean peso, facilitating the design of new strategies in various directions. This left the dollar exposed to a rebound, should expectations regarding copper deteriorate, among other potential factors.
the U.S. Currency has been recovering from its lows of 853 pesos seen on February 9th. The peso exited the podium of best-performing emerging market currencies in 2026, falling to fourth place. In total return, which includes interest on deposits, it ranks seventh in the ranking.
