- The US dollar goes back to the Chilean peso, currently quoting at 935.95.
- The dollar index (DXY) rebounds 0.51% in the day, reaching two days at 99.52.
- The price of copper loses 1.11% on the second day of the week, visiting minimums of May 23 in $ 4,6915 per pound.
- The CB consumer trust index rises to 98.0 in May from 86.0.
- The orders of the US durable goods decrease by 6.3%, improving market estimates.
The USD/CLP reacted the decline from May 23 to 942.28, where it found aggressive vendors that dragged parity to minimal not seen since May 14 in 936.25. At the time of writing, the USD/CLP falls 0.22%, currently operating over 935.95.
The Chilean weight can be seen despite the improvement in the economic data of the United States
Based on information provided by the United States Census Office, the requests for lasting goods registered a 6.3% decrease in April, improving estimates of a 7.9% drop. This figure is after the increase of 7 6% observed the previous month.
At the same time, the Conference Board Conference Conference Index increased to 98.0 points in May, above 86.0 points recorded in April.
After this news, the dollar index (DXY) rebounds 0.51% in the day, reaching May 23 at 99.52, ending with two consecutive days down.
Copper prices go back in 1.84%, visiting minimums of 2 days at $ 4,6915 per pound, extending yesterday’s losses.
In this scenario, the Chilean weight can be seen for the fourth consecutive session, while the USD/CLP falls 0.22% today, reaching minimum of May 14 at 935.95.
Technical levels in the USD/CLP
The USD/CLP reacted down from a short -term resistance given by the maximum of April 30 in 961.65. The immediate support is located at 928.21, a pivot point of May 9. Downwards, the following key support is 915.57, minimum 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.
