The Colombian peso sinks the US dollarsigning four consecutive days with losses.
He USD/COP It established a daily minimum at 4,181.71, finding aggressive buyers that promoted parity to three months not seen since January 2 at 4,416.50.
At the moment, andL USD/COP shoots 4.76% on the first day of the weekcurrently operating about 4,414.03.
The Colombian peso slides strongly in the middle of an intense commercial war
- Donald Trump has launched a warning to China today through the social network Truth Social, pointing out that, If the Asian country does not withdraw the 34% tariff to native goods from the United States before April 8, its administration will impose tariffs of 50% additional to Chinasuspending all negotiations.
- On the other hand, the National Administrative Department of Statistics of Colombia (DANE) will publish today the March consumption price index. The consensus hopes that it will be 5.15% below 5.28% observed in February.
- The US economic agenda contemplates the PUBLICATION OF FOMC minutes on Wednesdayas well as the March consumer price index, to be released on Thursday, April 10.
- In this context, the Colombian peso collapses to minimal not seen since January 2, while the USD/COP rebounds 4.76% today, quoting at the time of writing about 4,414.03, signing its fourth consecutive day with profits.
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 values in portfolio that expire 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.
