- The dollar rises 0.15% daily against Chilean peso, operating at the time of writing about 983.30.
- The dollar index (DXY) goes back 0.22%, signing its third consecutive day down.
- China’s manufacturing BNS PMI was 49.1 in January, below market estimates.
- The operators will be attentive to the decision of interest rates of the Central Bank of Chile and the Fed, to be published during the week.
The USD/CLP bounces from a minimum not seen since December 16 at 979.94, Cuba where they found buyers who took parity to a maximum of the day at 988.19. At the time of writing, the USD/CLP operates at 983.51, winning 0.15% on Monday.
Chilean weight loses land prior to the decision of its interest rates
The dollar index (DXY) extends losses today, falling 0.17%, to quote at the moment in 107.27 and consolidate in a minimum of December 18, 2024.
According to information provided by the National Office of Statistics of China (BNS), the Purchasing Managers Index (PMI) stood at 49.1 in January, disappointing the estimated and previous 50.1. The non -manufacturing PMI BNS fell to 50.2 in January compared to 52.2 registered in December.
On the other hand, the percentage of new US housing sales increased 3.6% in December, after 9.6% reached in December.
The attention of investors will be on the decision of interest rates of the Central Bank of Chile and the Federal Reserve, to be released on Tuesday and Wednesday, respectively.
Technical levels in the USD/CLP
The USD/CLP reacted downward in a short -term resistance given by the maximum of January 17 in 1,017.05. The closest support zone is located at 966.89, minimum of December 6. The following key support is at 940.90, Pivot Point of October 24 supported by the exponential mobile average of 13 periods.
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.
