- The US dollar earns 0.54% daily against Chilean peso, operating when writing at 938.75.
- The underlying price index of the US personal consumption expenditure increases by 2.8% in February, above market forecasts.
- The Chilean unemployment rate rises to 8.4% in February, exceeding consensus estimates.
- The US economic agenda contemplates the speeches of Michael Barr and Raphael Bostic, members of the Fed.
The USD/CLP established a daily minimum in 933.18, finding buyers who promoted the maximum of two weeks not seen since March 13 in 943.06. At the moment, the USD/CLP quotes over 938.58, rising 0.54% today.
Chilean weight loses traction after the increase in its unemployment rate
According to information provided by the National Institute of Statistics of Chile, the unemployment rate registered an increase to 8.4% in February, above 8.1% estimated and 8% observed in January.
On the other hand, the United States Economic Analysis Office announced that the underlying pricing index of personal consumption expenditure rose 2.8% in February, exceeding the previous and estimated 2.7%.
After this news, the dollar index fell 0.04% on Friday, operating currently over 104.21, signing its second consecutive session with losses.
In this context, the Chilean weight falls to a minimum of two weeks, while the USD/CLP rebounds 0.66%, reaching maximums not seen since March 13 in 943.06.
Investors will be attentive to the comments of Michael Barr and Raphael Bostic, members of the Federal Reserve.
Technical levels in the USD/CLP
The USD/CLP reacted upwards from a short -term support given by the minimum of March 19 in 915.57. To the north, the closest resistance is observed in 963.00, maximum of February 28. The next important resistance zone is 1,017.05, pivot point of January 17.
USD/CLP daily graphics
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
