- The US dollar falls to the Chilean peso, contributing currently at 985.19.
- The dollar index (DXY) loses 1.53% today, reaching minimal not seen since April 5, 2022.
- The US Production Price Index decreases to 2.7% annualized in March, under the projections of analysts.
- The price of copper rebuops 1.28% on Friday reaching maximums not seen since April 4.
The USD/CLP established a maximum of 989.39, finding vendors that dragged parity to a daily minimum at 982.59. At the moment, the USD/CLP operates over 985.78, falling 0.36% daily.
Chilean peso gains ground while the dollar index collapses at minimum three years
Based on the information presented by the US Labor Statistics Office, the production price index increased 2.7% annualized in March, below the 3.3% expected by the market and 3.2% observed in February.
After these results, the dollar index (DXY) falls 1.53% daily, when reaching a minimum of 3 years not seen since April 5, 2022, spinning two consecutive days down.
On the other hand, copper prices rebound 1.28% in the last day of the week, visiting a week of one week not seen since April 4 at $ 4,4522 per pound.
In this scenario, the Chilean weight is traded on positive terrain, while the USD/CLP decoced 0.36% in the day, staying within the previous session range at 985.19.
Technical levels in the USD/CLP
The USD/CLP reacted down from a short -term resistance given by the maximum of April 9 in 1,007.73. The next key resistance is observed at 1,017.05, maximum of January 17. Downwards, the key support zone is located at 915.57, a pivot point of March 19.
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.
