- The US dollar rises 0.28% in the day against Chilean peso, currently operating in 941,74
- The dollar index (DXY) rebounds 0.39%, reaching maximums of March 7.
- The US production price index increased by 3.2% annualized in February, improving market expectations.
- The weekly applications for unemployment subsidy fell to 220,000 in the week that ended on March 7, below the estimates of the analysts.
The USD/CLP established a minimum of the day at 939.09, finding buyers who promoted parity to maximum of March 10 in 943.81. At the time of writing, the USD/CLP quotes over 941.74, rising 0.28% daily.
Chilean weight depreciates after economic data of the United States
According to information released by the US Labor Department, the weekly unemployment subsidy requests were located in 220,000 in the week that ended on March 7. This figure is lower than the 225,000 already planned the 222,000 reached in the previous week.
Similarly, the production price index registered an increase of 3.2% per year in February, after 3.7% reached in January, below the 3.3% expected by the market.
After this news, the Chilean weight falls to a minimum of three days, spinning two consecutive sessions with losses, while the USD/CLP rebounds 0.33% today, reaching maximums of March 10 in 943.81.
On the other hand, the dollar index (DXY) rises 0.22% in the day, reaching highs of almost a week at 104.08.
At the same time, the price of copper extends its profits, consolidating at ten months at $ 4,8324 per pound, presenting a rebound of 0.83% on Thursday.
Technical levels in the USD/CLP
The USD/CLP remains within a side range comprised of a resistance zone given by the maximum of February 28 in 963.00 and a support in 924.55, minimum of March 6. The next key resistance is at 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.
