- The US dollar gains traction against Chilean peso, currently operating over 983.53.
- The dollar index (DXY) falls 1.27% daily, visiting minimums of April 3 in 101.48.
- The US Consumer Price Index is 2.4% annualized in March, below the projections of analysts.
- Copper prices lose 2.19% today, consolidating within the operational range of the previous session.
The USD/CLP marked a minimum of the day at 978.12 attracting aggressive buyers that led parity to a daily maximum in 988.00. Currently, the USD/CLP quotes at 983.53, rising 0.22% today.
The Chilean weight depreciates after a decrease in the US IPC inflation.
According to information submitted by the United States Department of Labor, the Consumer Price Index (CPI) was 2.4% in the annualized reading of March, improving the forecasts of 2.6% and the previous record of 2.8%.
On the other hand, the underlying IPC, which does not consider food and energy prices, increased by 2.8% annual, less than 3% estimated and 3.1% observed in February. At the same time, the weekly applications of unemployment subsidy reached 223,000 in the week that ended on April 5, in line with the projections of the analysts, although it is perior to the 219,000 reached in the previous week.
After this news, the dollar index (DXY) loses 1.27% on Thursday, reaching a week of one week not seen since April 3 in 101.48.
Similarly, the price of copper falls 2.19% daily, operating currently over $ 4,3277 per pound, staying within the April 9 range.
In this scenario, the Chilean peso reacts downwards from maximum of April 7, while the USD/CLP earns 0.22% today, consolidating within the operational range of the previous session at 983.53.
Technical levels in the USD/CLP
The USD/CLP established a short -term support given by the minimum of March 19 at 915.57. The following key support is observed at 894.25, minimum of September 30, 2024. Upper, the key resistance is located at 1,017.05, a 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.
