The Colombian peso falls in front of the US dollaroscillating within the range of Wednesday’s session.
He USD/COP It marked a daily minimum at 4,307.01, attracting buyers who promoted parity to a maximum of the day in 4.320.50.
Currently, the USD/COP wins 0.11% todayquoting when writing at 4,311.81.
The Colombian weight loses traction after the economic data of the United States
- The manufacturing index of the Federal Reserve of Philadelphia fell to -26.4 points in April from the +12.5 registered in March, worsening the +2 and projected by analysts.
- On the other hand, the weekly applications of unemployment subsidy decreased to 215,000 in the week that ended on April 12, below the 225,000 scheduled and the 224,000 registered in the previous week.
- The attention of investors will be placed on the statements of Michael Barr, a member of the Board of Governors of the FOMC.
- After this news, the Colombian peso operates in negative terrain, while the USD/COP rises 0.11% daily, consolidating within the operational range of Wednesday’s session at 4,311.81.
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.
