- The US dollar goes back to the Chilean peso, operating when writing about 932.16.
- The dollar (DXY) index falls 0.13%, reaching minimal not seen since March 1, 2022.
- Chile’s industrial production rises 4.6% in May, improving the registration of the previous month.
- The Chilean unemployment rate is 8.9%, fulfilling the expectations of analysts.
- The Chicago PMI registered a recoil at 40.4 points in June, worsening market estimates.
The USD/CLP reacted down from a daily maximum on 942.30, finding vendors that led a minimum of the day in 931.39. Currently, the USD/CLP slides 0.78% daily, quoting at 932.16.
Chilean weight can be seen after an increase in its industrial production
Based on the National Institute of Statistics of Chile, Chile’s industrial production increased 4.6% year -on -year in May, exceeding the increase of 3.8% observed in April.
At the same time, the unemployment rate was 8.9% in the same period, rising slightly from 8.8% recorded in the previous month, thus fulfilling the projections of the consensus.
In another front, the Chicago PMI corresponding to June receded to 40.4 points, located below the 43 estimated points and the 40.5 registered in May.
After these results, the dollar index (DXY) loses 0.10% in the first day of the week, visiting minimal not seen since March 1, 2022 in 96.98.
The Chilean weight gains traction after this news, while the USD/CLP falls 0.78% in the day, consolidating within the operating range of June 27 in 932.16.
Technical levels in the USD/CLP
The USD/CLP reacted down from a short -term resistance given by the maximum of June 23 in 953.62. To the south, the immediate support is observed at 915.57, 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.
