- The US dollar loses traction against Chilean peso, operating when writing about 942.76.
- The dollar index (DXY) rebounds 0.48% today, reaching two days in 100.12.
- The price of copper earns 0.45% daily, reaching May 7 at $ 4,6895 per pound.
- The weekly requests for US unemployment subsidy were located in 227,000 in the week that ended on May 17, improving expectations.
- The PMI is Global S&P services of the United States, rises to 52.3 points in May, above the analysts’s projections.
The USD/CLP reacted down from May 8 to 947.72, attracting aggressive vendors that dragged parity to minimum of May 20 in 941.21. Currently, the USD/CLP loses 0.11% in the day, quoting at 942.76.
Chilean weight gains land after the United States key data
Based on information provided by the United States Department of Labor, weekly unemployment subsidy requests were located in 227,000 in the week that ended on May 17. This figure is below the 230,000 scheduled and 229,000 reached in the previous week.
On the other hand, the preliminary PMI manufacturing Global S&P of the United States increased to 52.3 points from the estimated 50.1 and the 50.2 reached in April. Similarly, the PMI of services was 52.3 points, improving the previous and planned 50.8.
After this news, the dollar index (DXY) rebounds 0.45% on Thursday, reaching two days in 100.12, finished with a streak of three consecutive sessions down.
In this context, the Chilean weight advances slightly, while the USD/CLP falls 0.11% today, currently quoting in 942.76.
Technical levels in the USD/CLP
The USD/CLP formed a short -term resistance given by the maximum of April 30 in 961.65. The following important resistance is at 1,007.73, maximum of April 9. To the south, the immediate support is at 928.21, a pivot point of May 9.
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.
