- The US dollar advances to the Chilean peso, currently quoting in 939.69.
- The dollar index (DXY) loses 0.47% in the day, reaching May 27 at 99.39.
- The Chilean unemployment rate is at 8.8% in April, being above its previous registration.
- The preliminary GDP of the United States corresponding to the first quarter was 0.02%, improving analysts projections.
- Weekly applications for unemployment subsidy increased to 240,000, above market estimates.
The USD/CLP marked a minimum of the day in 936.89, finding buyers who promoted the maximum parity of May 23 in 942.50. At the moment, the USD/CLP advances 0.05%, operating when writing about 939.69.
Chilean weight depreciates in the middle of mixed economic data in the United States
According to the United States Economic Analysis Office, that the US Gross Domestic Product was contracted at 0.2% compared to the decrement of 0.3% expected by the market.
At the same time, the weekly applications for unemployment subsidy increased to 240,000 in the week that ended on May 24, which exceeding the estimates of 230,000 and 226,000 observed in the previous week.
After this news, the dollar index (DXY) reacted down from May 20 at 100.53, reaching May 27 at 99.39, losing 0.47% today, to end 2 consecutive days with profits.
On the other, the National Institute of Statistics of Chile, reported that the Chilean unemployment rate rose to 8.8% in April, above 8.7% observed in March.
The Chilean weight extends the marginal losses of yesterday, while the USD/CLP advances 0.05% on Thursday, consolidating within the previous session range at 939.69.
Technical levels in the USD/CLP
The USD/CLP established a short -term resistance given by the maximum of April 30 in 961.65. The nearest support is located at 928.21, Pivote point of May 9. To the south, 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.
