- The US dollar rebounds against Chilean peso, operating when writing about 942.31.
- The dollar index (DXY) earns 0.18% on Tuesday, oscillating within the previous session range at 99.11.
- Copper prices earn 0.32% today, currently quoting at $ 4,8475 per pound.
- The Chilean unemployment rate increases to 8.7% in March, exceeding market expectations.
- The operators will be attentive to the interest rate decision of the Central Bank of Chile, the consensus expects to remain unchanged by 5%.
The USD/CLP established a minimum of the day at 938.89, attracting buyers who promoted the parity to maximum on April 23 in 944.03. Currently, the USD/CLP advances 0.31% daily, contributing currently at 943.05.
Chilean weight loses land waiting for the interest rate decision of the Central Bank of Chile
Based on information presented by the National Institute of Statistics of Chile, the unemployment rate registered an increase to 8.7% in March, exceeding 8.6% expected and 8.4% observed the previous month.
On the other hand, the dollar index (DXY) earns 0.18% today, consolidating in Monday’s operational range at 99.12.
Copper prices extend their profits, rising 0.32% on Tuesday, reaching maximums of almost a week at $ 4,8892 per pound.
The focus of investors will be put in the decision of interest rates of the Central Bank of Chile at the close of the American session. The consensus of analysts expects the types to remain unchanged by 5%.
In this context, the Chilean weight signs its second consecutive day with losses, while the USD/CLP rises 0.32 % in the day, visiting maximums of April 2 in 952.52.
Technical levels in the USD/CLP
The USD/CLP reacted up from a short -term support given by the minimum of April 28 in 931.18. The following key support is located at 915.57, minimum of March 19. To the north the important resistance is at 1,007.73, pivot point of April 9.
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.
